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Unclaimed Property Focus
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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Sports Gambling Expansion Creates Unclaimed Property Ripple

Posted By Administration, Thursday, October 4, 2018

On May 14, 2018, the Supreme Court struck down the 26-year-old Professional and Amateur Sports Protection Act (PASPA) for violating the U.S. Constitution’s 10thAmendment. This ruling cleared the way for the expansion of legal sports gambling in states other than Nevada, which has allowed such wagering since 1949 and was grandfathered in when PASPA became law in 1992. 

 

Four additional states – Delaware, New Jersey, Mississippi and West Virginia – have already changed their state laws and launched their states’ sports betting industries. Rhode Island and Pennsylvania have passed similar laws and are preparing for sports betting’s introduction in the coming months.

 

New Jersey has wasted little time taking steps to amend its unclaimed property law to account for the legalization of sports betting. New Jersey Assembly Bill 4442 specifies that funds left in inactive Internet gaming accounts will be considered abandoned property after three years under the state’s Uniform Unclaimed Property Act. 

 

Throughout most of its history in Nevada, legalized sports betting has been strictly a cash business. If a consumer wished to bet $100 on the Cleveland Browns to win Sunday’s game, for example, the bet was placed in person at a brick and mortar casino’s sports book. 

 

More recently, Nevada has allowed sports books to wager via mobile apps, as long as sufficient protections ensure gamblers are located within the state when using such apps. Typically, gamblers are required to open accounts with the casino in person by depositing funds into a personal account, accessible via the sports book’s mobile app. These funds are then used for future bets, with the account total increasing or decreasing based on the results of the owner’s bets.  

 

Under the New Jersey bill, property holders (casino licensees) would be required to attempt to contact online gambling account owners “by mail, phone and computer” before closing dormant accounts. Upon closure, the casino licensee would keep 50 percent of the abandoned funds, with the other 50 percent turned over to the state’s casino control fund. 

 

On Sept. 17, 2018, the bipartisan bill was introduced to the state assembly and referred to the Tourism, Gaming and the Arts Committee. If passed and signed into law, the act will take effect immediately. 

 

As sports betting continues to expand, additional states are likely to consider similar legislation to formalize guidelines for handling dormant online gambling accounts and subsequent fund distribution. 

Tags:  casinos  gambling  New Jersey 

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UPPO Advocacy Update: September 2018

Posted By Administration, Thursday, September 27, 2018

To help members remain aware of UPPO’s advocacy activities, the Unclaimed Property Focus blog recently began including a recurring Advocacy Update when legislatures are active or significant advocacy activity has occurred. Following are September 2018 activities and trends from UPPO’s Government Relations and Advocacy Committee (GRAC).

 

Holders Coalition Submits Comments, Meets with IRS Regarding Revenue Ruling Conflict

The Holders Coalition – a group of organizations, including UPPO, whose members hold or represent owners of property – submitted comments on Sept. 4, 2018, to Internal Revenue Service and Department of Treasury officials regarding IRS Revenue Ruling 2018-17. The comments seek clarification and guidance regarding compliance with the ruling, issued by the IRS on May 29, 2018.

 

Subsequently, Holders Coalition members, including UPPO members Jennifer Borden and Dana Terry, ICI and SIFMA representatives, met with IRS and Treasury officials. The meeting was productive, and the government representatives seemed to understand that the implementation timeline is tight and may consider delaying implementation. Discussion of other issues from the revenue ruling resulted in meeting participants agreeing to conduct additional research and reconvene for a follow-up meeting soon. Stay tuned for additional updates on this important topic. 

 

UPPO Offers to Assist Department of Labor

During a recent U.S. Chamber of Commerce event focused on retirement, a Department of Labor benefits regulator announced that work is underway to develop guidance for employers who no longer have contact with former employees who remain enrolled in company retirement plans. 

 

Preston Rutledge, assistant secretary of labor for the Labor Department’s Employee Benefits Security Administration, said the EBSA will work with businesses and trade groups to develop best practices regarding employers’ responsibilities to contact plan participants regarding their benefits. 

 

In response to this announcement, UPPO sent a letter to Rutledge, offering its support and assistance. Representing the unclaimed property holder community, UPPO can provide valuable input and perspective to the EBSA as it develops its employer guidance.

 

UPPO Surveys State Administrators About Recent Reporting Changes

UPPO recently surveyed state unclaimed property administrators, requesting information about a variety of possible changes affecting holder reporting. Twenty-five states responded. The information they provided has been compiled and is now available. View the survey resultsUPPO’s Fall Reporting Guide has also been updated to include this information.  

 

Priority Issue Workgroups

In preparation for the next congressional session, the GRAC Priority Issue Workgroups have been refining talking points and developing single-page position papers about key issues. 

 

California Posts Fall Holder Newsletter 

The California Controller’s Office recently published the latest edition of its quarterly Unclaimed Property Division newsletter for holders. The newsletter includes articles about optimizing owner reunification, automatically renewing CDs and interest billing assessments, along with a holder notice report checklist. 

 

New Jersey Introduces Sports Gambling Unclaimed Property Bill

A recent Supreme Court ruling cleared the way for legalized sports gambling to expand to states other than Nevada. New Jersey not only became one of the first additional states to allow such wagering, but also the first to consider the expansion’s effect on unclaimed property. New Jersey Assembly Bill 4442 specifies that funds left in inactive Internet gaming accounts will be considered abandoned property after three years under unclaimed property law. 

 

As more and more legislatures and regulatory agencies take on issues affecting unclaimed property compliance, advocacy has become an increasingly important role for UPPO.

Please take a few minutes to complete our Government Relations and Advocacy Survey to help us build our grassroots network. Responses will give us the ability to mobilize UPPO members when we are faced with legislative and regulatory challenges and opportunities.

 

 

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Five Reasons to Attend the 2019 UPPO Annual Conference

Posted By Administration, Thursday, September 20, 2018

Registration is now open for the 2019 UPPO Annual Conference, March 24-27 in New Orleans. Each year, the conference provides an unmatched opportunity for unclaimed property professionals to learn about the latest developments in their field and talk shop with peers. The 2019 conference is shaping up as a must-attend event. Here are five of the top reasons to participate.

 

Education for All Experience Levels

The 2019 UPPO Annual Conference agenda features more than three dozen educational workshops and sessions. Concurrent workshops cover four tracks – basic, intermediate, advanced and special focus – making it easy for attendees to find the best options for their experience and interest levels. 

 

Industry-Specific Breakouts

Because the nuances of unclaimed property vary by industry, getting together with other people who face the same industry-specific challenges you do is invaluable. Breakout sessions will give attendees a forum to compare notes with peers in these industries: banking/finance; securities/mutual funds/broker dealers/transfer agents; life insurance; P&C insurance; manufacturing; retail/hospitality; oil & gas/energy; telecommunications & technology; healthcare providers and insurers; and state government. 

 

Continuing Education Credits

Attendees can earn Continuing Professional Education credits and Continuing Legal Education credits for attending the UPPO Annual Conference. CLE credits require action by Dec. 14, 2018, so review the requirements and register early!

 

Great Location

New Orleans is known for great food, music, nightlife, history and culture. Whether simply visiting the legendary French Quarter or getting out and seeing less familiar neighborhoods, explore the great city of New Orleans while attending the annual conference. There’s no other city in the world quite like it. 

 

Fun Networking Events

Among the biggest benefits to attending the UPPO Annual Conference are making new connections and reconnecting with familiar faces. In addition to receptions, breaks and meals, the conference includes a couple opportunities to explore New Orleans and network in casual settings. This year’s UPPO Scholarship Program event is a one-hour French Quarter walking tour, where you can learn about the city’s history, music, food or haunted history. Conference attendees will also have the opportunity to visit Mardi Gras World, the largest float designing and building facility in the world, for dinner, drinks and fun at the Tuesday evening event. 

 

These are just a few of the reasons to register today for the 2019 UPPO Annual Conference. Visit the conference website to learn more, view the agenda and begin planning your conference experience. Need help getting approval to attend? We’ve compiled a few tips and tools to make it easier. Register early to take advantage of the lowest rate, and make your plans to join us in March. 

 

 

Tags:  UPPO Annual Conference 

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Building a Strong P&P Foundation

Posted By Administration, Thursday, September 13, 2018
Updated: Wednesday, September 12, 2018

Unclaimed property policies and procedures define a company’s goals and actions in pursuit of its goals to protect its interests. They are intended to strengthen compliance with the reporting requirements, and maintain an effective and efficient method to process, report and remit unclaimed property. 

 

What are the basic building blocks needed to document the reporting function and all of its responsibilities?

 

Understand reporting responsibilities for your company. Rules and regulations vary significantly by jurisdiction and industries. Despite this multitude of rules, look for opportunities to simplify. For many companies, the majority of unclaimed property exposure reside in a handful of states. If that’s the case, they may be able to base their procedures around what those states require. Staying on top of the legal requirements in the states where the majority of business occurs is typically the most effective use of limited resources. 

 

More conservative companies may put practices into place that ensure blanket compliance with the most stringent states’ requirements even if it means going far beyond the requirements in other states. 

 

Identify all potential sources of unclaimed property. Because states consider so many different types of property as reportable, it’s important to leave no stone unturned when outlining company policies and procedures. 

 

Review types of accounts and activities within the general ledger. Identify accounting activities for amounts reversed to income or expense, write-offs, voided checks and clean-up reversals. Evaluate promotional programs and contractual terms, loyalty programs, rebates and incentives programs, invoicing and settlement practices. Determine whether owner names and addresses are available.

 

Document not only what is considered unclaimed property in your company, but also other areas that have been reviewed and determined to not require reporting. Doing so helps ensure consistent application of policies and procedures. 

 

Build a team. Resources dedicated to unclaimed property may be scarce, so begin with what you have and build on it. You may not have buy-in from all the necessary people immediately, but as they become more familiar with what unclaimed property is, why compliance matters and how their role in compliance is important to the company’s goals, buy-in will increase. 

 

Involve all entities, divisions and departments. Define and assign responsibilities. For each area, establish department procedures, including:

  • Identifying unclaimed property. 
  • Researching.
  • Setting materiality limits and time frames. 
  • Detecting errors or irregularities. 
  • Resolving with the owner. 
  • Retaining adequate supporting documentation. 

Address how mergers and acquisitions will impact annual reporting. When becoming aware that a merger or acquisition has occurred, the holder must analyze the specific terms of the agreement to know what’s being purchased and what’s being retained – and whether there’s a provision addressing unclaimed property. Addressing M&A activity in unclaimed property procedures can help avoid confusion when such a transaction is under consideration or has recently occurred. 

   

Create an audit-ready one-stop shop. Actively following policies and procedures will make things much easier if auditors or other stakeholders require documentation of unclaimed property decisions. Recommended steps include: 

  • Create a designated unclaimed property liability account. 
  • Capture requisite details needed for reporting. Analyze data accessibility and evaluate the cost-benefit of automation.
  • Reconcile to a subledger database.
  • Establish record retention provisions. 
  • Safeguard unclaimed property, including data security controls, segregation of duties and internal controls and oversight. 

Establishing policies and procedures is merely the beginning of their lifespan. Unless they are followed, maintained and updated, guidelines and documentation serve little purpose. Make sure to include provisions for regularly reviewing and updating policies and procedures, and communicating changes to team members. 

 

Tags:  policies  procedures  Unclaimed Property 

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Court Rules California Unclaimed Property Guidance Are Invalid Regulations

Posted By Administration, Thursday, September 6, 2018

Judge Harold Kahn with the California Superior Court in San Francisco ruled two California unclaimed property regulations invalid on July 18, 2018, saying the state controller had improperly adopted them. 

 

According to the court order granting summary judgment in the case of Thrivent Financial for Lutherans v. Betty T. Yee, et al., Case No. CGC-15-548384, the California controller imposed two pieces of “guidance” as regulations without following state requirements for adopting regulations.

  • The state’s “External Database Regulation” required life insurers to compare its insureds’ life insurance policies or other records against the Social Security Administration’s Death Master File or similar database to determine whether any insureds were deceased in order to comply with California Unclaimed Property Law obligations.
  • The “Dormancy Trigger Regulation” required that a life insurance policy is reportable as unclaimed property under the California Unclaimed Property Law no later than three years after the insured had died, even if less than three years had elapsed since the insurer’s records disclosed that the insured had died. 

The regulations appeared in the September 2013 Holder Handbook, issued by the controller’s office. Insurer Thrivent Financial filed suit in 2015, arguing that they were improperly adopted. Defendant Betty Yee, in her role as California controller, responded that the Holder Handbook was intended to provide best practices and was not intended as regulations.

 

The court disagreed with the defendant and ordered the controller’s office to remove reference to the regulations from any materials it disseminates to life insurance companies “unless accompanied by a conspicuous disclaimer that the purported requirements of the two regulations are merely defendants’ views and do not have any legal effect.”

 

The ruling also allows the defendant to take steps to comply with the state’s Administrative Procedure Act in order to properly enact the regulations. 

 

In addition to the immediate effect on life insurers complying with California laws, the ruling raises issues about guidance published by other state and federal agencies. Treatment of such guidance as requirements rather than informal opinions could be problematic, and could be subject to scrutiny as a result of the Thrivent decision. 

Tags:  California  dormancy  life insurance  litigation  thrivent financial 

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