National Association of Unclaimed Property Administrators. Legislative Update

Transcription

1 Natinal Assciatin f Unclaimed Prperty Administratrs Legislative Update E. Suzanne Darling, Esq., Vice President, Xerx State & Lcal Slutins Charles S. Hellman, Esq., Managing Directr, Verus Financial LLC The Fremst Authrity n Unclaimed Prperty

2 Natinal Assciatin f Unclaimed Prperty Administratrs Life Insurance and Death Master File Matching Over the past year, DMF legislatin has cntinued t be passed based primarily n the NCOIL Mdel Unclaimed Life Insurance Benefits Act. The NCOIL Mdel Act as riginally adpted in 2011 requires insurers t: Perfrm peridic cmparisns f in-frce life insurance plicies, annuities, and retained asset accunts against the DMF; Make a gd faith effrt t cnfirm the death fr all matches and determine if benefits are due under the plicies; Make a gd faith effrt t lcate beneficiaries f all unpaid benefits; Reprt prceeds as unclaimed prperty if the beneficiaries cannt be fund NAST Treasury Management Training Sympsium Unclaimed Prperty Track

3 Natinal Assciatin f Unclaimed Prperty Administratrs Life Insurance and Death Master File Matching In 2014, NCOIL undertk a review t cnsider amendments t its Mdel Act. In Nvember 2014, NCOIL adpted an amended Mdel Act. Amng ther things, the amended Mdel Act: Cntinues t require DMF cmparisns f all in-frce life insurance plicies; Requires insurers t implement fuzzy lgic in cnducting DMF cmparisns; Adds definitins fr: Knwledge f Death Prpsed by ACLI & ppsed by NAUPA; Nt used except in definitins sectin Recrd Keeping Services Duplicative f ther grup life prvisins Excludes statutry insurance interest frm being remitted as unclaimed prperty NAST Treasury Management Training Sympsium Unclaimed Prperty Track

4 Natinal Assciatin f Unclaimed Prperty Administratrs Life Insurance and Death Master File Matching Currently a ttal f18 states have passed DMF legislatin (AL, AR, GA, IA, ID, IN, KY, MD, MS, MT, ND, NM, NV, NY, RI, TN, UT, and VT). Legislatin passed in mid 2014 mid 2015: Indiana SB 425 (5/5/15)(amending 2014 law) Arkansas SB 768 (4/2/15) Utah HB 168 (3/27/15) Idah SB 1023 (3/20/15) Rhde Island HB 7031 / SB 2308 (6/30/14) Iwa SF 2342 (5/30/14) Tennessee SB 2516 (5/19/14) Currently pending legislatin: Illinis, Massachusetts, and Nrth Carlina 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

5 Natinal Assciatin f Unclaimed Prperty Administratrs Life Insurance and Death Master File Matching T date, a majrity f the legislatin passed requires DMF cmparisns f all infrce plicies (IA, ID, KY, MD, MT, ND, NV, NY, RI, VT). Several f the laws passed within the past year limit applicatin f DMF cmparisn requirement: Indiana (amending 2014 law t apply t newly-issued plicies nly) Arkansas (newly-issued plicies nly); Tennessee & Utah (newly-issued plicies nly unless prir asymmetric use f DMF) Over the past year, several bills prpsing limited DMF cmparisns have failed (Oklahma; Virginia, Pennsylvania, Luisiana) NAST Treasury Management Training Sympsium Unclaimed Prperty Track

6 Natinal Assciatin f Unclaimed Prperty Administratrs Life Insurance and Death Master File Matching Sme insurance cmpanies have lbbied heavily t limit DMF cmparisns. Limiting DMF cmparisns is incnsistent with amended NCOIL Mdel Act: The Nvember 2014 mdel, amng ther things, affirms the initial mdel s retractive prvisin 11/28/14 NCOIL Press Release NAUPA has ppsed legislatin that limits DMF cmparisns: NAUPA believes it is imperative that the Mdel Act cntinue t apply t all f an insurers in-frce plicies 4/7/14 Letter frm NAUPA t NCOIL 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

7 Natinal Assciatin f Unclaimed Prperty Administratrs Life Insurance and Death Master File Matching Over the past year, there has been activity in tw cases invlving challenges t legislatin requiring DMF cmparisns by insurers. United Ins. C. f Am. v. Kentucky: In April 2013, trial curt ruled that KY s NCOIL law applied retractively and did nt vilate cnstitutin: Amng ther things, curt stated that willful ignrance f the death f the insured amunts t unjust enrichment at the expense f sme f the least privileged citizens in this state. In July 2014, appellate curt reversed trial curt n narrw grunds that law did nt adequately express intent t be applied retractively; KY has filed petitin seeking review by the KY Supreme Curt. United Ins. C. f Am. v. Maryland Ins. Admin.: In March 2014, curt dismissed challenge t MD s NCOIL law due t failure t exhaust administrative remedies; In April 2014, curt denied mtin t stay enfrcement f law pending appeal NAST Treasury Management Training Sympsium Unclaimed Prperty Track

8 Natinal Assciatin f Unclaimed Prperty Administratrs Life Insurance and Death Master File Matching The NAIC Unclaimed Life Insurance Benefits Wrking Grup is develping a new mdel law t address the issue f unclaimed death benefits. On March 28, 2015, a meeting was held t discuss whether the NCOIL Mdel Act shuld be used as a starting pint fr NAIC s develpment f a mdel law. Testimny was heard frm a number f entities at the March meeting, including: ACLI - NCOIL Mdel Act shuld be the basis fr NAIC mdel law with sme prpsed mdificatins (including mdificatins that had been rejected by NCOIL); Kemper - NAIC shuld use the NCOIL Mdel Act as the basis fr NAIC mdel law, but make it apply prspectively nly; FL Ins. Cmm. (n behalf f NAIC Task Frce n Life/Annuities Settlement Practices) - NAIC mdel law must apply, at a minimum, t all currently infrce plicies as well as plicies t be issued in the future NAST Treasury Management Training Sympsium Unclaimed Prperty Track

9 Natinal Assciatin f Unclaimed Prperty Administratrs Life Insurance and Death Master File Matching What can be expected t happen next? States will cntinue t cnsider passing DMF search legislatin. The NAIC will cntinue t wrk n its wn mdel legislatin. Litigatin invlving challenges t DMF search legislatin will prceed. The ULC is cnsidering amendments t the Unifrm Unclaimed Prperty Act that will include DMF search requirements NAST Treasury Management Training Sympsium Unclaimed Prperty Track

10 Natinal Assciatin f Unclaimed Prperty Administratrs Escheat f US Savings Bnds In 2000, Kansas was the first state t pass a law fr the escheat f US savings bnds. The State takes title t the bnds by instituting a civil prceeding in State curt. In 2014, Kansas was allwed by the US Treasury t redeem savings bnds in its pssessin but Treasury refused t redeem ther bnds Kansas sued fr the redemptin f the remaining bnds The Department f Treasury s mtin t dismiss is pending 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

11 Natinal Assciatin f Unclaimed Prperty Administratrs Escheat f US Savings Bnds Since the 2014 NAST Treasury Management Training Sympsium, fur additinal states have adpted savings bnd laws: Arkansas (SB 356) Luisiana (SB 603) Missuri (SB 621) Indiana (SB 282) 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

12 Natinal Assciatin f Unclaimed Prperty Administratrs Escheat f US Savings Bnds Savings bnd bills are pending in seven states: Flrida (HB 887/SB 1138) Gergia (HB 322) Maine (SB 320) Nevada (AB 18) New Hampshire (SB 134) Ohi (HB 64) Suth Carlina (HB 3852) Texas (SB 1916) One savings bnd bill was defeated: Virginia (HB 2398/SB 1465) 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

13 Natinal Assciatin f Unclaimed Prperty Administratrs Escheat f US Savings Bnds Ten States Prvide fr the Escheat f US Savings Bnds WA ME AK OR CA NV ID UT MT WY CO ND SD NE KS MN IA MO WI IL MI OH IN KY WV NY PA VA VT NH MA RI CT NJ DE MD DC AZ NM OK AR TN NC SC HI MS AL GA TX LA FL PR 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

14 Natinal Assciatin f Unclaimed Prperty Administratrs Escheat f US Savings Bnds Wh Pays the Csts f Cllecting and Redeeming US Savings Bnds? The riginal KS legislatin and the bills that fllwed made n prvisin fr recuping csts f cllecting and redeeming savings bnds Savings bnd bills passed in AR and IN this year allw the states t deduct the expenses f cllecting and redeeming the bnds frm claims Pending bills in ME, NV, NH, OH, and TX als allw the states t deduct expenses frm claims The pending bill in SC specifically prvides that n such csts may be taxed against a claimant 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

15 Natinal Assciatin f Unclaimed Prperty Administratrs Publicatin Requirements Three states eliminated the requirement fr publicatin f wner names and addresses in a newspaper Arkansas (HB 1665) Gergia (SB 82) Wyming (HB 63) 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

16 Natinal Assciatin f Unclaimed Prperty Administratrs Publicatin Requirements Twenty-three States d nt Require Newspaper Publicatin f Owner Names WA ME AK OR CA NV ID UT MT WY CO ND SD NE KS MN IA MO WI IL MI OH IN KY WV NY PA VA VT NH MA RI CT NJ DE MD DC AZ NM OK AR TN NC SC HI MS AL GA TX LA FL PR 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

17 Natinal Assciatin f Unclaimed Prperty Administratrs Administrative Appeals Prcedures Kansas (HB 2687): Established an administrative hearing prcess in accrdance with the State Administrative Prcedure Act when audit results are disputed New Yrk (Title 2 NYCRR Part 130): Established an administrative hearing prcedure when a claimant disputes the Cmptrller s demand fr repayment fllwing a determinatin that a claim was apprved and paid in errr Michigan (HB 4703): Established an administrative hearing prcess when a hlder disputes the Administratr s ntice f determinatin after an audit that the hlder has failed t reprt prperty as required by law Mississippi (Title 38 Part 4): Established an administrative prtest and appeals prcess fr an aggrieved claimant, wner, hlder, r ther persn wh asserts a grievance with any decisin r actin taken by the Unclaimed Prperty Divisin 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

18 Natinal Assciatin f Unclaimed Prperty Administratrs Business-t-Business Exemptin Missuri (HB 1075) exempted certain B2B prperty Applies t any utstanding check, draft, credit balance, custmer verpayment, r unidentified remittance Must be issued t a business entity r assciatin as part f a cmmercial transactin Must be issued in the rdinary curse f business The hlder and the business entity r assciatin must have an nging business relatinship Business credits between tw business entities were als exempted Any credit ffered frm ne business t anther in exchange fr gds r services but that des nt have a redeemable cash value 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

19 Natinal Assciatin f Unclaimed Prperty Administratrs Business-t-Business Exemptin A B2B exemptin bill is pending in Nevada (AB 348) The exemptin wuld apply t credit memranda, verpayments, credit balances, depsits, unidentified remittances, nnrefunded vercharges, discunts, refunds and rebates An nging business relatinship is als required 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

20 Natinal Assciatin f Unclaimed Prperty Administratrs Business-t-Business Exemptin Furteen States have a Business-t-Business Exemptin WA ME AK OR CA NV ID UT MT WY CO ND SD NE KS MN IA MO WI IL MI OH IN KY WV NY PA VA VT NH MA RI CT NJ DE MD DC AZ NM OK AR TN NC SC HI MS AL GA TX LA FL PR 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

21 Natinal Assciatin f Unclaimed Prperty Administratrs Electrnic Cntact Pennsylvania (HB 278) bradened the types f cntact r activity that will prevent abandnment f prperty Indicatin f an interest in prperty includes a secure r passwrdprtected electrnic cntact, cmmunicatin, r transactin Affirmative written r electrnic assent t a change in terms and cnditins under which prperty is held is cntact that will prevent abandnment f a bank accunt A pending bill in Luisiana (HB 692) allws electrnic cntact n bank accunts and ther depsit accunts in banking and financial rganizatins A pending bill in New Yrk (SB 5003) directs the Cmptrller t prmulgate regulatins establishing when electrnic cmmunicatin cnstitutes written cntact 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

22 Natinal Assciatin f Unclaimed Prperty Administratrs Electrnic Cntact Califrnia and Vermnt previusly enacted laws t recgnize electrnic cntact Califrnia When Prperty Held by Business Assciatin Escheats t State (a) Subject t Sectins 1510 and 1511, the fllwing prperty held r wing by a business assciatin escheats t this state: (1) (A) Except as prvided in paragraph (6), any demand, savings, r matured time depsit, r accunt subject t a negtiable rder f withdrawal, made with a banking rganizatin, tgether with any interest r dividends theren when the wner, fr mre than three years, has nt dne any f the fllwing: (ii) Crrespnded electrnically r in writing with the banking rganizatin cncerning the depsit. Vermnt Presumptins f abandnment (d) An indicatin f an wner's interest in prperty includes: (6) an electrnic recrd f an internet accunt inquiry r actin, when made via the use f the wner's unique persnal identificatin infrmatin, may establish an indicatin f the wner's interest in the prperty, prvided that the inquiry r actin is traceable t the wner and nt t a third party and was nt caused by an event within the electrnic system NAST Treasury Management Training Sympsium Unclaimed Prperty Track

23 Natinal Assciatin f Unclaimed Prperty Administratrs Reductin f Drmancy Perids Arkansas (HB 1782) reduced drmancy perids frm five t three years fr: Debt instruments Demand, savings, and time depsit accunts Demutualizatin prperty Miscellaneus intangibles Mineral prceeds Pennsylvania (HB 278) reduced drmancy perids frm five t three years fr almst all prperty types, including: Demand, savings, and matured time depsits Safe depsit bx cntents Life and annuity plicies Underlying shares Dividends, interest, and distributins n securities Bnd principal and interest Fiduciary prperty Prperty held by gvernments Miscellaneus intangibles 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

24 Natinal Assciatin f Unclaimed Prperty Administratrs Definitin f Last Knwn Address New Jersey (NJAC 17:18) redefined last knwn address A descriptin f the lcatin f the apparent wner sufficient fr the purpse f determining which state has the right t escheat the prperty The zip cde f the apparent wner s last knwn address is sufficient 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

25 Natinal Assciatin f Unclaimed Prperty Administratrs Pure Escheat Hawaii (SB 2321) As f July 1, 2014, funds ttaling less than $100 are subject t wner claims fr 10 years and after that time escheat t the State Fr funds depsited prir t June 30, 2014, the 10-year limitatin cmmences July 1, NAST Treasury Management Training Sympsium Unclaimed Prperty Track

26 Natinal Assciatin f Unclaimed Prperty Administratrs Third Party Auditrs and the Examinatin Prcess Delaware (SB 11) After January 1, 2015, n third party auditr may be assigned mre than 50% f cntracted examinatins Unclaimed prperty examinatin r cnsulting cntracts shall nt exceed a term f five years and current cntracts shuld be negtiated dwn t that same level N third party auditr shall hire r cmpensate any emplyee f the Department f Finance in a supervisry rle related t unclaimed prperty fr tw years frm the time such emplyee leaves state service The Secretary f Finance shall develp a manual fr the cnduct f unclaimed prperty examinatins and update administrative regulatins 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track

27 Natinal Assciatin f Unclaimed Prperty Administratrs Stred Value Cards New Jersey (SB 2235) Repealed the prspective requirement that a stred value card issuer btain name and address infrmatin r, at minimum, retain the wner r purchaser s zip cde Wyming (HB 63) Intangible prperty includes a merchant stred value card (a stred value card redeemable at a single merchant r affiliated grup f merchants issued in a specified amunt and purchased n a prepaid basis) A merchant stred value card with a remaining balance f mre than $100 is abandned five years after the later f date f issuance, date f last activity, r date f increase in card balance purchased by the wner A merchant stred value card is nt subject t abandnment if it has n expiratin date and des nt impse any fees ther than an initial charge 2015 NAST Treasury Management Training Sympsium Unclaimed Prperty Track