Friday, January 25, 2013

Lost & Found: Mark Your Calendars

Recently, we mentioned that the Unclaimed Property Professionals' Organization's Annual Conference was coming up this March.  In case you can't make it out to San Diego this Spring (and even if you can) the following are some other unclaimed property events that might be worthwhile for you and/or your unclaimed property team:

Delaware VDA Webinar -- As we've covered previously, Delaware is currently sponsoring a limited time enhanced Voluntary Disclosure Agreement program sponsored by the Secretary of State's office, complete with a snazzy website that provides a great deal of information about the program.  In keeping with the new program's outreach efforts, the Delaware Secretary of State will be holding a webinar on January 28th at 3pm to provide detailed information about the VDA program.  Registration information can be found at the aforementioned snazzy website.

NAUPA Holder's Workshop (May 14-17 in Pittsburgh, PA) -- If UPPO is considered the primary holder-centric unclaimed property interest group, then its state counterpart is the National Association of Unclaimed Property Administrators (NAUPA).  NAUPA is affiliated with the National Association of State Treasurers and acts to "support excellence and professionalism among those individuals charged with the responsibilities of unclaimed property administration and compliance."  Among other things, NAUPA also hosts an annual "Holder's Workshop" as a learning and networking event for unclaimed property professionals.  This year's event will be held in Pittsburgh from May 14th to the 17th.  Prospective attendees should visit NAUPA's website for more information.

Tuesday, January 22, 2013

Uniform Law Commission to Consider New Uniform Unclaimed Property Act

Many states' unclaimed property laws are based upon one of the Uniform Unclaimed Property Acts promulgated by the National Conference of Commissioners on Uniform State Laws (NCCUSL) -- either the 1995 Act or one of its predecessors, the 1981 or 1952 Uniform Acts.  The NCCUSL is not a group of state legislatures (or even state legislators), but rather is a group of appointed commissioners who are responsible for devising, debating and drafting uniform laws that are intended to be widely adopted by the individual states in order to promote legal uniformity.  The NCCUSL is probably best known for the promulgation of the Uniform Commercial Code, which governs a variety of commercial transactions.

In any event, given the relative infrequency with which the Uniform Unclaimed Property Acts have been amended (i.e., every 20 to 30 years or so), any action by the NCCUSL with respect to unclaimed property tends to be significant.  For example, when the commission last took action in promulgating the 1995 Act, the Colorado Avalanche were still known as the Quebec Nordiques, the invention of the DVD had just taken place, and blogs did not exist. 

Thus, it is notable that last week the NCCUSL announced the formation of a "study committee" to consider revisions and/or amendments to the Uniform Act.  According to the release, the committee will be appointed shortly.  Once formed, the committee may suggest amendments to the current (1995) Uniform Act, draft a completely new uniform act, or decide that no action is warranted.

Wednesday, January 16, 2013

UPPO Annual Conference - March 24-27 in San Diego

The Unclaimed Property Professionals' Organization is a association of unclaimed property professionals and service providers "dedicated to advancing industry best practices for unclaimed property practitioners."  Unlike other trade groups that focus on a particular profession or industry (e.g., manufacturers, banks, healthcare) the UPPO is group of unclaimed property professionals (as the name suggests) across the whole spectrum of industries. 

The UPPO holds many events throughout the year, but the most popular is the organization's annual conference.  This year's conference will be March 24-27 in San Diego, California.  The Conference brings together professionals and experts in a wide variety of areas, and offers dozens of presentations, educational program and industry-specific roundtables.*  The Conference also offers separate learning tracks for beginner, intermediate and advanced unclaimed property professionals.  There is something for everyone.  Additional information can be found at the UPPO's conference page here.

* Disclaimer:  The author is a UPPO member and will be a speaker at the conference. 

Friday, January 11, 2013

Lost & Found: California Photo Gallery, Tips for Seniors

California Unclaimed Property Photos:  Ever wonder what kind of stuff people put in safe deposit boxes?  Wonder no longer!  The Sacramento Bee has posted a photo gallery of California's "security room" that holds property recovered from unclaimed and/or abandoned safe deposit boxes.  The photos are part of a bid by Controller John Chiang to raise awareness of California's unclaimed property program.

Missouri Posts Unclaimed Property Tips for Seniors:  Speaking of unclaimed property outreach programs, Missouri State Treasurer Clint Zweifel is working on an outreach program to collect Missouri seniors with their unclaimed property.  As part of the program, the Treasurer's office has put together a set of tips for searching and claiming property.  While the tips were drafted as part of the senior outreach program, most of it is sound advice for anyone.

Monday, January 7, 2013

New York Amends Insurance Law to Require Quarterly Searches of Death Master File

Another in the long running sage of unclaimed insurance benefits and the Social Security Administration's "Death Master File" ("DMF").  For those of you who haven't followed this story earlier, here's a brief recap:

Generally, when a person with life insurance dies, the estate or a beneficiary of the policy notifies the insurance company to begin the benefit payment process.  For a variety of reasons, however, this notification may never take place.  Either the policyholder died without a beneficiary, or the beneficiaries did not even know that a policy existed. 

Th current controversy revolves around the insurers' use (or, more to the point, alleged non-use) of the macabre sounding "Social Security Death Master File" 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 search the SSN Index to identified individuals who have dies so they can stop paying annuities (i.e., products that pay out until death), but then don't use that same information with regard to the payment of life insurance benefits (i.e., those products that pay out upon death).

In November of 2011, 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 were due as of that date.  The New York state legislature has now joined the fray, and has promulgated a law requiring quarterly searches of the DMF.

Pursuant to Assembly Bill 9845, signed into law by Governor Cuomo on December 17, 2012, each insurer subject to the act is required to cross-check all policies and accounts against the DMF "no less frequently than quarterly" in an effort to determine whether death benefits are payable.  The new law also has an infrastructure or IT component as well, requiring insurers to "implement reasonable procedures to account for common variations in data" that might preclude an exact match (presumably misspellings, transcribed numbers, etc). 

The Act will take effect on June 15, 2013.


Wednesday, January 2, 2013

Securities & Exchange Commission Approves New Lost Shareholder Rules

On December 21, the U.S. Securities and Exchange Commission approved new rules requiring broker dealers to perform searches for "lost shareholders."  Under preexisting law -- specifically Rule 17Ad-17 -- "transfer agents" (that is, those entities serving as the custodian of shareholder records for stock issuing companies) were required to perform searches for "lost shareholders" including, but not limited to, searching commercially available databases for new address information.

The new rules apply Rule 17Ad-17's requirements to the broker-dealer firms that hold hundreds of thousands of customer accounts.  Generally, the new rule requires broker-dealers to search for "lost securityholders" by conducting two database searches.  One between three and twelve months of such securityholder becoming a lost securityholder, and the second between six and twelve months after the first search.  The rule defines "lost securityholder" as a customer to whom correspondence and/or account statements are returned as undeliverable.  Note also that the cost of the required searches may not be assessed against the lost securityholder or his or her account.

Of course, many brokerage firms already perform statutory due diligence when they receive account statements or other correspondence as undeliverable.  For two reasons, however, it could be argued that the new SEC rules are more likely to be effective than the due diligence requirements of most states' unclaimed property laws.  First, the database searches required by the SEC rule are a higher standard of due diligence that most states' unclaimed property laws.  Second, the SEC rule requires the holder to act much more quickly (i.e., 6 months as opposed to 3 years) than most state requirements.

A copy of the draft rule can be found here.  The new rule will become effective 60 days after it is published in the Federal Register, and broker-dealers will have one year from that date to come into compliance.