UPRR

Michigan Legislation Would Reduce Required Reach Back and Record Retention Periods

kanderson — Tue, 15 May 2012 23:52:53 +0000

On April 27th, a bill was introduced into the Michigan House of Representatives that decreases the period from 10 to 5 years within which the Michigan unclaimed property administrator may bring an action or proceeding under the unclaimed property law. Similarly, for holders required to file a report under the Michigan unclaimed property law, the bill would change the unclaimed property record retention requirement from 10 years after property becomes reportable to five years. The bill has been assigned to the Commerce Committee for review.

As House Bill 5577 bill progresses, UPRR will provide more information. For immediate information, go to: Michigan Reach Back and Record Retention Reduction

New Jersey Gift Card Changes Repeal Bill on the Move!

kanderson — Mon, 14 May 2012 21:06:28 +0000

In 2010, the state of New Jersey enacted legislation that forced gift card distributors to collect information about the card’s purchasers. The goal of the legislation was to increase state revenues by deeming unused gift cards eligible for escheatment. Instead, the controversial legislation resulted in some major distributors, including American Express, ceasing their distribution and sale of gift cards in New Jersey, thus reducing the state’s tax revenues associated with the sales.

In response, the state legislature is now considering a bill that would reverse the 2010 law. The bill, New Jersey AB 1871, has passed the state assembly and is now before the state senate for debate and review.

UPRR will keep you informed about the latest developments with New Jersey AB 1871. For immediate bill information go to: New Jersey UP Gift Card Repeal

Unclaimed Property Regulation Continues to Expand Globally

kanderson — Thu, 26 Apr 2012 14:33:34 +0000

Unclaimed property continues to be a hot topic outside of the United States. On December 16, 2011, the Unclaimed Financial Assets Act became effective in Kenya joining South Africa as another non-U.S. country passing laws to regulate unclaimed property.

Watch for news in the coming months as UPRR announces its plans for global unclaimed property expansion.

Similar to Kentucky, New York Legislature Considering Bills Requiring Life Insurers to Perform Death Master File Searches

kanderson — Mon, 23 Apr 2012 20:14:33 +0000

Two bills were recently introduced into the New York Legislature (SB 6943 and AB 9845) that require life insurers semi-annually to perform searches on life policies and retained asset accounts. As introduced these bills are identical and mandate that life insurance compare policyholder details to the Social Security Administration’s Death Master File. Further, within 90 days after identifying a potential match, the life insurers must attempt to confirm the death of the insured or retained asset account holder and upon conclusive evidence of death must also determine if benefits are due. If benefits are due, the life insurer has a duty to use good faith to locate the beneficiaries.

These bills are similar to a Kentucky HB 135 which was signed into law by Governor Steve Beshaer on April 11, however, the Kentucky bill requires that the searches be performed quarterly instead of semi-annually as stated in the New York measures. The Kentucky law, which has an effective date of January 1, 2013, also requires that a good-faith effort to locate beneficiaries be made within 90 of identifying benefits due.

If either New York bill is signed into law, the effective date as stated in each bill is 180 days after the bill becomes law.

As noted in previous blog posts, UPRR provides the most comprehensive search capabilities to locate policyholder beneficiaries as well as their decedents, even with minimal information. For more information, email John Bambach at jbambach@uprrinc.com.

For more information on SB 6943, click here.

For more information on AB 9845, click here

More Companies Announce Gift Card Pullout Due To NJ Law

kanderson — Mon, 09 Apr 2012 16:15:29 +0000

Joining American Express which made a similar move days before, InComm and Blackhawk Network in separate announcements on April 5th indicated that they would stop distributing gift cards in New Jersey stores. The two companies supply gift cards to about 3800 retailers in New Jersey. Both companies are scheduled to remove the cards in June unless a 2010 New Jersey law requiring collection of customer information is reversed. Many gift card issuers and distributors have noted the cost and difficulty in complying with this mandate. Implementation of the law had been delayed due to an injunction challenging various components of the law, but the injunction was lifted recently. Currently, the New Jersey legislature is considering a bill that would repeal the zip code collection provision. This bill, AB 1871 passed the Assembly on March 15, 2012 and awaits action by the New Jersey Senate.

Michigan Legislature to Consider Banning Contingent Fee Unclaimed Property Audits

kanderson — Fri, 06 Apr 2012 15:12:34 +0000

On March 29th, House Bill 5524 was introduced in the Michigan legislature which would prohibit the state from hiring an auditor on a contingent fee basis or “other similar method that may impair an auditor’s independence or the perception of independence by the public”. This bill serves as an acknowledgement of the actual, if not only perceived, unfairness of the common practice of cash-strapped states hiring third party auditors to perform unclaimed property audits. In doing so, the state has no upfront costs and pays the auditor a negotiated percentage of the total unclaimed property the auditor uncovers. Of course, this creates an unintended incentive for the auditor to become overzealous in setting the audit scope and in applying estimation methods and other audit practices.

UPRR will keep a watchful eye on this legislation. To review the actual Michigan bill, click here:

http://www.legislature.mi.gov/documents/2011-2012/billintroduced/House/pdf/2012-HIB-5524.pdf

Reacting to NJ law, Amex Pulls Gift Cards from New Jersey Stores

kanderson — Thu, 05 Apr 2012 13:09:21 +0000

The only way that New Jersey residents can now buy American Express (“Amex”) gift cards is to buy them directly from American Express. Prompting this action is a New Jersey law enacted in Fall 2010 which requires retailers to collect the zip code of all gift card purchasers. Correspondingly, this law requires remittance of the value of gift cards with New Jersey zip codes to the New Jersey Treasury if the cards have been unused after 2 years. Implementation and enforcement of the zip code capture requirement was stalled soon after the law was passed due to lawsuits and an injunction issued by a US District Court was placed upon the provision. The injunction was lifted which opens the door for the New Jersey Treasury to begin implementation.

Prior to the passage of the 2010 legislation, businesses were not required to report or remit the value of unused gift cards. Interestingly, a bill is progressing through the legislature that would repeal the statutory changes made in 2010 including the zip code provision. This bill, AB 1871 passed the Assembly on March 15, 2012 and awaits action by the New Jersey Senate. Speculation is that if this legislation is not passed, other gift card issuers, like Amex, will pull their gift cards from third party stores leaving New Jersey consumers with limited purchasing options.

For more information, click here: http://www.ca3.uscourts.gov/opinarch/104551p.pdf

A New Unclaimed Property Program in Ontario?

kanderson — Fri, 30 Mar 2012 13:59:41 +0000

On March 27, 2012, Ontario’s Minister of Finance Dwight Duncan presented a provincial budget that was explained as a 5-year plan to balance the budget. The proposal includes spending reductions of $17.7 billion over 3 years and an increase of revenues of $4.4 billion without tax increases. One of the many measures mentioned to increase revenues was the establishment of an “Unclaimed Intangible Property Program” which would allow unclaimed money to be used to benefit all provincial residents. The proposed program was described as including, among other things, the proceeds of insurance policies, returned stocks and bond, bank deposits, unpaid wages, and pension benefits.

UPRR will be vigilant and provide more information as program details are announced. For more information on the Ontario Budget proposal, click here: http://www.fin.gov.on.ca/en/budget/ontariobudgets/2012/ch1.html#c1_unclaimedIP

Trade Association Asks DE Governor to Review Unclaimed Property Interpretation

kanderson — Thu, 29 Mar 2012 22:20:01 +0000

On March 27th, the Securities Transfer Association (STA) sent a formal request to Delaware Governor Jack Markell, asking that he review a recent interpretation of the Delaware unclaimed property statute that the STA believes may, “inappropriately disenfranchise shareholders from ownership rights”. At issue is the Delaware State Escheator’s interpretation that the Delaware unclaimed property law no longer requires the location of the owner be unknown (“lost”) and that there merely must be no “owner-generated” activity for three years for the property to be required to be remitted to the state. As the STA aptly states in their letter to Governor Markell, this interpretation is particularly onerous for shareholders who have dividend reinvestment accounts or who have elected for cash dividends to be automatically deposited in a specific bank account. In these situations, the shareholder has given an affirmative direction that dividends be either reinvested or deposited automatically without any additional action on the shareholder’s part to make these actions occur. Unfortunately, the Delaware interpretation could cause these shareholders, who are receiving communications such as statements and 1099′s at their current addresses, to have their property remitted to the state because they haven’t taken any overt action on the accounts for three years, even though they set up the accounts so that they wouldn’t require further activity

Given that many state unclaimed property divisions, including Delaware, often liquidate the shares soon after receipt, shareholders or their heirs may claim from the state only the sale proceeds. The shareholder will not get back the same type of property that was escheated, and will not realize any increases in market value. This serious concern is one of the chief reasons for the STA’s appeal to Governor Markell.

To view the STA’s letter to Governor Markell, click here: http://www.stai.org/pdfs/2012-03-delaware-letter.pdf

South Dakota Reduces 5 and 4 Year Dormancy Periods to 3 Years

kanderson — Tue, 27 Mar 2012 21:12:16 +0000

On March 2nd, South Dakota Governor Dennis Daugaard signed into law HB 1270 which reduces most unclaimed property dormancy periods to 3 years, including funds owed under life insurance policies and annuities. The bill also changes the requirements for the state to publish notice of reported owner information. These publication changes include excluding items valued at under $125 from the publication requirement and reducing the number of times this owner information must be published to one time instead of one time in each of two consecutive weeks. The effective date of these changes is July 1, 2012 and will impact reports to be filed this Fall.

For the text of this bill click here.