Unclaimed property laws have been around since the 1930s, but have become broader and more frequently enforced in the last 25 years. With 56 Unclaimed Property Departments in the United States, remaining compliant with the varying state unclaimed property laws is a significant challenge. To add to the complexity of handling unclaimed property, existing rules are being reinterpreted in surprising new ways. According to the National Association of Unclaimed Property Administrators (NAUPA), in 2015 states held $41.7 billion in their unclaimed property programs.
Since the passage of the Sarbanes-Oxley corporate reporting law in 2002, companies have had to tighten their auditing processes. These and other changes in corporate governance have dramatically increased the amount and value of unclaimed property being collected by all 50 states.
In 2011 the top 30 insurance companies received multi-state unclaimed life benefits audits requiring the carriers to perform routine death audits against insurance blocks of business. By 2013, the audits expanded to 80% of all life insurance carriers. These unclaimed property audit settlements superseded contract law approved by the states’ insurance departments and cost insurance companies hundreds of millions of dollars in operational costs. Nineteen states have adopted unclaimed property laws for unclaimed life benefits that require routine death audits be performed on blocks of business.
In 2013, the Treasurer of Massachusetts initiated a nationwide unclaimed property audit against Mutual Fund providers. In 2014, California announced a major settlement with Morgan Stanley that included 34 states. This settlement defined new customer-initiated contact and unclaimed property dormancy standards for its non-retirement, employee stock plan and individual retirement accounts, including 403(b) accounts.
Berwyn Group has tremendous experience working with life validation and data cleansing projects. One-third of the life carriers that entered into multi-state Global Resolution Agreements (GRAs) for unclaimed life benefits chose to work with Berwyn Group. We help corporations with their pre-escheat data clean up as well as identify other potential data issues.
If you have any questions on how our tools might assist you in meeting your unclaimed property goals, please contact us.