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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 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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Texas responds to UPPO’s request for clarification of H.B. 1454

Posted By Administration, Thursday, May 18, 2017

Passed in June 2015, Texas law H.B. 1454 goes into effect on Sept. 1, 2017. The law allows property owners to designate a “representative for notice,” which triggers a requirement that the holder must mail or email the required due diligence notice to both the representative and the owner.


Representatives may not claim or access the owner’s property, but can stop the dormancy period by communicating with the holder knowledge of the owner’s location and confirmation that the owner has not abandoned the property. The new requirements also require holders to include the name and last-known mailing or email address of the representative when reporting unclaimed property.


In December 2016, UPPO posed several questions to Texas unclaimed property officials in an effort to receive clarity about the new requirements for the holder community. On April 24, 2017, Texas responded. The letter from Texas is prefaced with a statement advising that the letter is intended to provide general guidance and that no formal changes have been adopted by the Texas Comptroller of Public Accounts (comptroller).


Covered property types

UPPO sought clarity regarding which property types are covered by the law, specifically asking if IRAs and both open-end and closed-end mutual funds are covered. In its response, Texas specified that funds deposited with a bank or other financial institution in an interest-bearing account, checking account or savings account are included. This includes mutual funds held in an IRA, but those “would not be subject to abandonment until they would normally be reportable as unclaimed property.”


Methods to obtain representative information

Texas clarified that although the comptroller will provide a form holders may provide to owners to designate a representative it is not required and therefore other methods used to collect this information are acceptable. Texas expects to make the form available before Sept. 1, 2017, and “anticipate[s] that holders will inform customers of the option to designate a representative.”


Criteria for becoming a representative

UPPO requested clarification regarding specific criteria for being designated a representative and whether the designated person has to provide consent. Texas responded that it anticipates requiring that the representative be an individual over 18 years old who does not own the account. The state doesn’t anticipate requiring a legal relationship between the owner and representative, or requiring consent.


Duration and reporting of representative appointment

Texas anticipates its representative designation form will give holders the ability to specify the duration of the designation, according to the letter. Without such stipulation, the designation would be perpetual unless revoked. It seems likely that the form will actually give the ability to specify the duration of the designation to owners—not holders—and that the wording in the letter was an error.


Holders would not need to notify the comptroller of changes to designated representatives, only to list them when reporting unclaimed property. The comptroller is updating its electronic holder report format to accommodate representative details. The updated format should be announced before Sept. 1, 2017.


Multiple accounts

The state clarified that the representative designation form will give owners the ability to specify the accounts for which the representative is a designee. There will be an “all accounts” option. Communication from the representative regarding one account does not affect the abandonment period for any accounts for which that person is not designated as a representative.


UPPO will continue to monitor implementation of H.B. 1454 and will report on additional developments as needed.



Tags:  compliance  due diligence  Texas  unclaimed property 

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New Pennsylvania and Texas due diligence requirements raise questions

Posted By Administration, Tuesday, February 21, 2017

In recent years, Pennsylvania and Texas enacted new unclaimed property due diligence requirements that affect holders this year. In both cases, the statutes raise several questions for holders required to comply with the new requirements.



Last year, Pennsylvania amended its unclaimed property law, effective Sept. 12, 2016. Among the changes was the addition of a due diligence requirement. According to draft guidance from the state, the new due diligence requirement applies to all property to be reported on April 15, 2017.  


The due diligence requirement specifies that property holders must send a notice to owners between 60 and 120 days before reporting the property to the state treasurer. The requirement applies to any property valued at $50 or more for which the holder has an owner address it believes is valid.


Holders are also permitted to provide optional, additional notice any time between the date of last activity by, or communication with, the owner and the escheatment date, under the new requirement.


Unless the holder has valid consent from the owner for electronic contact the owner, written notice must be sent by first-class mail. The holder is required to include descriptions of the property and property ownership, value of the property (if known) and information for contacting the holder to avoid escheatment of the property.


The due diligence requirement’s language raises several questions for holders. It is unclear whether having valid consent to communicate electronically triggers a requirement that the holder must provide the notice electronically, or if the holder has the option to provide notice either electronically or by first class mail.


It is also unclear what constitutes owner consent to receive the due diligence notice electronically. Does the consent have to specifically mention due diligence notices? Does consent apply if the owner agreed to receive only specific types of documents, such as tax forms, electronically?


UPPO has raised these questions via comments to Pennsylvania’s treasurer in hopes of receiving clarification for the holder community.



In June 2015, Texas passed H.B. 1454, which includes new due diligence requirements, effective on Sept. 1, 2017. Under the new requirements, if a property owner has designated a “representative for notice,” the holder must mail or email the written notice required upon presumption of abandonment to the representative in addition to mailing the notice to the owner.


The requirements specify that, although the designated representative does not have any rights to claim or access the property, the dormancy period will cease if the representative communicates to the holder knowledge of the owner’s location and confirms that the owner has not abandoned the property.


Holders are also required, under the new requirements, to include the name and last-known mailing or email address of the representative for notice designated by the holder.


As with Pennsylvania’s new requirements, the Texas requirements raise several questions for holders:

  • What types of property are covered? The law specifies mutual funds, deposit accounts and safe deposit boxes, but doesn’t specify whether both open-end and closed-end mutual funds, and IRAs are included?
  • What are the acceptable methods for obtaining representative information? The requirement specifies that the comptroller provides a form that a holder may make available to an owner to designate a representative. However, it does not specify whether this is the only acceptable method for collecting this information.
  • Is there any criteria for being designated as a representative for notice, and does the designated representative have to provide any sort of consent to serving this role?
  • How long does a designation of being a representative for notice last, and are there any requirements for an owner to revoke this designation and/or for a holder to notify Texas of the revocation?
  • If the owner holds multiple accounts with the same holder, is designation of a representative for notice on one account considered applicable to all accounts? Likewise, does a representative response regarding one account automatically reflect interest in all of the owner’s accounts maintained by the holder?

UPPO has raised these questions with Texas officials and will continue to monitor implementation of the new requirements.



Tags:  due diligence  Pennsylvania  Texas  unclaimed property 

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UPPO seeks clarification about Pennsylvania’s due diligence and IRA provisions

Posted By Administration, Thursday, October 6, 2016

On July 13, 2016, Pennsylvania Gov. Tom Wolf signed H.B. 1605 into law. The massive bill revises the commonwealth’s Fiscal Code, including its unclaimed property program. Among H.B. 1605’s unclaimed property provisions are requirements for conducting due diligence and escheating Individual Retirement Accounts (IRAs). Unfortunately, the law’s language is causing confusion for unclaimed property holders. In an effort to gain clarity, UPPO submitted a letter to Treasurer Timothy Reese and legislative leaders on Sept. 22, 2016.


Due Diligence

One of the new statutory provisions imposed by H.B. 1605, Section 1301.10A, requires holders to perform due diligence for property valued at $50 or more when the holder’s records do not disclose the owner’s address to be inaccurate. The statute specifies that holders must send written notice by first class mail, “unless the owner has previously agreed to a method of electronic notice that remains valid to contact the owner.”


The statute’s wording opens the door to multiple interpretations. It is unclear whether an owner’s agreement to receive electronic notices triggers a requirement for the holder to use electronic communication or merely gives the holder the option to choose either first class mail or electronic communication.


The due diligence provision also fails to specify what constitutes owner agreement to receive electronic communication. It fails to define whether the owner’s request to receive any type of communication from the holder is sufficient or if the agreement must specifically include due diligence notices. Similarly, it causes confusion for holders who have received consent to send specific types of communication via one method (tax forms by mail, for example) and other types of communication via another (i.e., general account information by email). 


IRA Distributions

Under federal law, IRA owners are allowed to take account distributions beginning at age 59 ½ without penalties and are required to take account distributions beginning at age 70 ½. If they choose to take distributions before 59 ½, they are subject to an additional 10 percent “early distribution” tax (with some well-defined exceptions).


Section 1301.8(2) of H.B. 1605 suggests that IRAs could be reportable to Pennsylvania regardless of the owner’s age. This could trigger the 10 percent early distribution penalty for owners under the age of 59 ½. Because the Internal Revenue Service has not addressed whether unclaimed property reporting of an IRA owned by someone younger than 59 ½ triggers the early distribution tax, the change to Pennsylvania’s law could lead to several unintended risks for IRA owners and custodians, including:

  • The incorrect application of taxable income reporting.
  • Tax withholding and overall tax liability computation.
  • Long-term loss of compounded interest earned on account balances.
  • Long-term loss of the accrued value of reinvested dividends no longer accruing on accounts.
  • General interference with the long-term retirement investing goals of individuals who often use IRAs as passive, long-term investments with no expectation of the need to access the funds prior to retirement.

In its comments, UPPO encouraged Pennsylvania officials to consider the potential negative tax consequences of the unclaimed property provisions on the commonwealth’s residents and questioned whether the state has the authority to subject residents to such consequences.


Federal Preemption

The new IRA dormancy standard in H.B. 1605 also may conflict with federal law governing the creation, control and tax treatment of such accounts. UPPO points out that the tax implications from IRA distributions required by the new law contradict Congress’ intent to provide a clearly defined and heavily regulated tax benefit to retirees. Thus, the state’s unclaimed property law would violate the Constitution’s Supremacy Clause, which establishes that federal law takes precedent.


Pennsylvania Law Inconsistency

In addition to the apparent conflict with federal law, H.B. 1605’s IRA provisions seems to conflict with Pennsylvania’s own unclaimed property principles. UPPO writes, “The Pennsylvania Disposition of Abandoned and Unclaimed Property is founded on the premise that the Commonwealth may take custody of property that is ‘payable or distributable’ to an owner, but which the owner has abandoned or neglected to claim. The change implemented by H.B. 1605 permits the Commonwealth to take custody of assets that are not ‘payable or distributable,’ and ignores whether the owner has truly abandoned the property or not. Thus, the legislation crosses over the threshold of taking custody, and acts instead to confiscate the assets of Pennsylvania residents.”


A spokesperson for Pennsylvania’s Treasury Department told The Wall Street Journal that the dormancy standard was aimed at protecting retirement account beneficiaries, allowing them to access IRA accounts when the owner died before the mandatory IRA distribution age. The wording of the new IRA dormancy provision, however, is overly broad for that intent.


UPPO hopes to receive clarity regarding these issues soon. We will update membership via the blog with news and developments related to the UPPO letter or these regulations. View UPPO’s letter.



Tags:  compliance  due diligence  IRAs  Pennsylvania  unclaimed property 

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Industry Focus: Property and Casualty Insurance

Posted By Administration, Thursday, November 19, 2015

The property and casualty insurance industry pays out more than $400 billion annually in policy benefits, according to the American Insurance Association. Most of those payments are issued by check, opening the door to unclaimed property issues. Delores Dupras, senior accountant with Amica Mutual Insurance Company, and Wilson Barmeyer, associate with Sutherland Asbill & Brennan LLP, will lead a discussion about the unique intricacies of property and casualty insurance unclaimed property as part of the new, Industry Focus educational track at the 2016 UPPO Annual Conference.


“Property and casualty insurers issue a large number of checks under a lot of different situations,” says Barmeyer. “It’s different than reviewing payroll checks, where they’re standard amounts on set terms at regular intervals to people you’re paying on a recurring basis. Every uncashed check made out on a claim payment has a unique set of facts, and there’s a huge volume. That can create questions about what is unclaimed property.”


Settlement offers

One area of confusion surrounding property and casualty insurance is what constitutes a settlement offer from an insurer. An insurance company may issue a check as an offer to settle a claim. If the recipient cashes the check, that represents an acceptance of the settlement offer. If the payment amount is disputed, those checks can go uncashed for years.


“Many state statutes exclude offers of settlement from unclaimed property because they are not fixed and certain obligations,” says Barmeyer. “A company might process thousands of claims, and there can be disputes on a lot of them about the exact obligation. That creates an unclaimed property issue over whether there is a fixed and certain obligation that constitutes property for the purposes of abandoned property law.”


Not all insurance payouts are offers to settle. However, some insureds fear that by cashing a check, they are relinquishing their rights to additional payments on a claim.


“A lot of people are nervous about cashing checks because they worry that they are agreeing to a settlement offer or what happens if they develop complications to an injury,” Dupras says. “If anyone is unsure about cashing a claims check they should reach out to the issuing company to discuss future options.”


Owner identification

Another area ripe for confusion in the property and casualty insurance industry is identifying rightful property owners. When third parties, such as body shops or mortgage companies are involved, it’s not always clear whether the insured or the third party has rights to the insurance funds.


Deceased and divorced policyholders are other common sources of ownership questions. For example, if a homeowner dies and his son pays the bills but is unable to officially take ownership or sell the home because of red tape, should he receive the funds when the homeowner’s policy is cancelled with excess premium on the account? Likewise, with divorced couples there can be questions regarding which spouse is the property owner. Also, if the property is jointly owned and the divorce was messy, one party may be less than helpful providing location or contact information for the ex-spouse.


Unopened mail

Because insurance companies send out a high volume of marketing mail, it’s not uncommon for recipients to throw away unopened checks and due diligence letters, thinking they are sales pitches. Thus, the discarded checks become unclaimed property.


“We have changed our mailing of due diligence letters to have an exterior envelope with a blurb about unclaimed property in hopes that this will prompt people to open the correspondence,” Dupras says. “The last thing we want to do is turn over funds of a current insured or receive a letter from the state to an address that they have lived at for numerous years.”


To learn more about the issues surrounding property and casualty insurance, attend the 2016 UPPO Annual Conference, March 20 – 23. The new, Industry Focus Track will provide educational content specific to industry-specific needs and complement the industry-specific breakouts, which offer a facilitated, private forum to network and discuss industry-specific trends, nuances and challenges with peers. Register today.


Tags:  due diligence  property and casualty insurance  unclaimed property 

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Tending Due Diligence

Posted By Pete Billows, vice president at UPRR and Cindy Nisley, senior vice president at Georgeson , Thursday, January 23, 2014
Updated: Thursday, January 23, 2014

Due diligence is an opportunity to do more than just fulfill a state-mandated requirement. If your company’s main objective in its due diligence program is to achieve compliance, why not set goals to assume a note-worthy response rate and sustain positive external relations? Due diligence can be more than just a tactic in your compliance plan; it can be a part of your company’s strategic business plan.

Objective: Achieve compliance with state requirements

Due diligence is deemed as the last attempt to unite the owner with their property before it is remitted to the state. As with most things, states have different requirements for due diligence programs, so it’s best to consult with a service provider and/or state administrators. Here are some of the details that vary by state that affect a due diligence outreach:

  • Language required in the letter
  • Format or medium the follow-up can be sent through – mail, email, phone
  • Dormancy periods of property types
  • Timeframe to respond to notice

We’ll be covering the regulatory requirements, state exceptions and the elements of a due diligence letter during the 2014 UPPO Annual Conference session, Tending Due Diligence. Register for the conference happening March 23-26, 2014 in Grapevine, Texas today!

Objective: Achieve a response rate you’re proud of

Make your work count. Don’t let your letter be another white envelope in recipients’ mailboxes. Think outside the box and infuse creativity into the letter and packaging to encourage responses. If you have to send the letter anyway, why not try to make it a letter that will actually achieve something and can prevent your company from sending more property to the state than necessary.

Review this article for creative tips to make sure your letter is opened.
More tips will be shared during the 2014 Annual Conference, March 23-26, Grapevine, Texas so make sure to attend!

Objective: Sustain positive relations with external publics

Help your publics keep what is theirs. Spending the time to reunite an owner with their property is worth it -- whether it’s a simple thank you or brand loyalty, your publics will be happy you took the time.

To prevent that appreciation your publics had when they received the letter from leaving, make sure your company is prepared and instills an infrastructure that can respond accurately and quickly to questions and requests made by property owners. Each company will have a slightly different method of handling requests, so evaluating the amount of property and internal resources will be helpful in deciding what will work best for your company.

If you need help establishing or improving your company’s due diligence program, attend the Tending Due Diligence session at the 2014 UPPO Annual Conference, March 23-26 in Grapevine, Texas. You’ll learn the critical objectives, steps and deadlines that should be included in every program. In addition, we’ll present tips and suggested practices to encourage owner response, and the nuances of due diligence.

About the Authors

Peter Billows is vice president at Unclaimed Property Reporting & Recovery (UPRR), and a UPPO member. He has spoken at various UPPO events, most recently the 2013 Holders Seminar and will be speaking at the 2014 Annual Conference on Monday, March 24 during the Tending Due Diligence session. Contact Billows at 646-564-9202 or

Cindy Nisley is senior vice president at Georgeson, and a current volunteer on the UPPO Government Relations & Advocacy Committee. She was a speaker at the 2013 Holders Seminar and will be co-presenting with Billows during the Tending Due Diligence session at the UPPO Annual Conference. Contact Cindy at 201-386-3533 or

More Resources
Creative Tips to Boost Due Diligence Letter Response Rates
Using Third-Party Vendors for Due Diligence Needs

Tags:  2014 Annual Conference  best practices  due diligence  education  unclaimed property 

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