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Showing posts from January, 2012

Unclaimed Property News Roundup

Asset Recovery Firm Brings Whistleblower Action Against Prudential and MetLife -- According to Courthouse News Service , an Illinois asset recovery firm claims to have "discovered" that life insurance companies were not escheating certain benefit assets properly to the State of Illinois.  As regular readers know, the states have been pursuing administrative actions against insurers for this reason for most of the year.  For their trouble, the plaintiff seeks only the thanks of a grateful state . . . and, oh yeah, about $500 million . Unclaimed Property Mentioned on Lifehacker - The personal productivity site Lifehacker is one of our favorites.  A few days ago, Lifehacker ran a top ten list of ways to "Avoid Fees and Get Free Money."  Along with other suggestions such as switching to a credit union and maximizing those credit card award programs, the article mentioned searching for and claiming unclaimed property as an easy way to increase your funds. Arkans

Reminder: Michigan Voluntary Compliance Program Application Deadline is January 31

As we mentioned last month, the State of Michigan is sponsoring Voluntary Compliance Program for holders of unclaimed property that may owe unclaimed property to the state.  The program is open to both holders who have never reported unclaimed property and those who have reported  (but underreported unclaimed property) to the state.  If you are interested, better act fast.  Pursuant to the  program , interested holders must enroll by January 31, 2012, and will have until July 1 to file a report for the current report year and the four previous report years.  In return, the state will agree to waive the interest and penalties that may otherwise be assessed for the late reporting or remittance of property.

A Programming Note

We've gone on a brief hiatus due to the birth of a baby escheator.  Back again on Monday.

Unclaimed Property News Roundup: More Insurance Settlements, Wisconsin Unclaimed Property Sales, NJ (Re)Reintoduces Gift Card Legislation

Prudential Settles Life Insurance Inquiry -- There is another update with regard to the multistate examination into life insurance benefit payment practices .  When we last left the story in November, Vermont announced a $500,000 settlement with one insurer.  Now, according to the Wall Street Journal , California and Massachusetts have entered into a settlement with Prudential to resolve that firm's payment of unclaimed life insurance benefits.  As we've described earlier, 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

The "Other" New Jersey Case: Appeals Court Upholds Shortened Dormancy Period for Travelers' Checks

The same day that the U.S. Court of Appeals for the Third Circuit issued its opinion as to the validity of New Jersey's 2010 unclaimed property law amendments relating to stored value cards, it also rendered an opinion on American Express's challenge to a separate part of the law that shortened the dormancy period for travelers' checks from 15 years to 3 years.  The Court of Appeals determined, as did the district court, that the New Jersey law was presumptively valid. The key to the court's decision in this case was the application of a "rational basis" standard of review.  Under a "rational basis" standard, a court will not invalidate legislation so long as it is in furtherance of some legitimate government purpose.  In the Amex case, the court determined that the travelers' check legislation could been seen as furthering the legitimate governmental purpose of making the escheat laws "uniform" by making nearly all dormancy peri

Unclaimed Property News Roundup: Ohio Anniversary, Delaware Proposed Regulations, NJ Cases

Ohio Division of Unclaimed Funds Celebrates 30th Anniversary :  According to The Columbus Dispatch , the Ohio Division of Unclaimed Funds just celebrated its 30th anniversary of administering the Buckeye State's unclaimed property program.  According to the article, the DUF has returned in excess of $800 million during that time.  No word if Ohio residents are flooding the Division with unclaimed pearls in honor of its 30th anniversary. Delaware Proposes Due Diligence & Audit Appeal Regulations : The Delaware Department of Finance is  proposing regulations concerning due diligence for holders of securities-related property.  According to the proposed regulations, holders reporting security positions valued at $250 or more would be required to send notification mailings to the apparent owner no more than 120 days, and no less than 90 days, before reporting property to the State.  Separately, the State also issued proposed regulations to detail the procedures to be followed

Breaking News: Appeals Court Rules in NJ Gift Card Litigation

The U.S. Court of Appeals for the Third Circuit just issued its opinion in the New Jersey gift card litigation.  First, a brief recap.  In July of 2010, New Jersey passed a wide-sweeping gift card law.   Among other things, that law: Imposed a 2 year dormancy period on most stored-value cards; Required sellers of stored value cards to collect name and address information (or at least zip code info) from purchasers (the "Zip Code Requirement"); Required sellers of "merchandise only" stored value cards (i.e., those redeemable solely for goods and services) to escheat the full dollar value of those cards retroactively.  In other words, gift card issuers were required to escheat the full dollar value of cards that were issued long before NJ passed this law (the "Face Value Requirement"); and Created a "place of purchase presumption" for cards sold in New Jersey without collection of name and address, the presumption (of course) being that those

Looking for Unclaimed Pension Funds? Try the PBGC.

Although the rules and regulations governing the reporting, custody and claiming of abandoned or unclaimed property are generally a matter of state law, there are a few areas that involve the federal government.  Examples are unclaimed savings bonds and deposits held by failed banks .  Another example is unclaimed pension benefits.  Prior to the enactment of the 1974 Employee Retirement Income Security Act (ERISA) , many companies went out of business and/or ceased operations without sufficient funds to pay accrued pension benefits for retired and active workers.  One of the most famous examples was the so-called " Studebaker Incident " where the closing of that automaker's plant in Indiana left thousands of employees without pensions.  Although the enactment of ERISA did not require any company to create a benefit plan, it did require companies sponsoring benefit plans to maintain certain funding levels and required measures to safeguard pension funds.  ERISA also cre

LA Times: Congress Targets TSA's Use of Unclaimed Funds

The Los Angeles Times recently had an article about the accumulation of pocket change at the security checkpoints (over $376,000!) and the Transportation Security Administration's use of those funds.  As the article explains , current federal law allows the TSA to keep all amounts left at security checkpoints "for the purpose of providing civil aviation security" (see  here for the applicable law). According to the LA Times, Congressman Jeff Miller (FL-1st) wants to change that law by providing that such unclaimed funds would be donated to the USO .  That legislation (text here ) is currently pending before the House Subcommittee on Transportation Security.