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Introduced Version Senate Bill 599 History

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Key: Green = existing Code. Red = new code to be enacted

WEST virginia Legislature

2016 regular session

Introduced

Senate Bill 599

By Senators Hall, Carmichael, Prezioso and Plymale

[Introduced February 15, 2016;
Referred to the Committee on the Judiciary.
]

A BILL to amend and reenact §36-8-2 of the Code of West Virginia, 1931, as amended, relating generally to Uniform Unclaimed Property Act; clarifying intent of Legislature that the state’s insurance laws regulating insurance apply to proceeds of unclaimed life or endowment insurance policies and annuities payable upon death; eliminating any perceived inconsistency between insurance laws and Uniform Unclaimed Property Act; eliminating unintended interpretation of law expressed in the case of State of West Virginia ex rel. John D. Perdue v. Nationwide Life Insurance Company, No. 14-0100 (W. Va. June 16, 2015); clarifying that law as it existed prior to such decision regarding when presumption of abandonment arises with respect to a life or endowment insurance policy or annuity payable upon proof of death be consistent with insurance laws; and providing that this amendment shall have retroactive effect given its intent to restate and clarify law as it did exist and was intended to exist prior to above-referenced court decision.

Be it enacted by the Legislature of West Virginia:


That §36-8-2 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:

ARTICLE 8. UNIFORM UNCLAIMED PROPERTY ACT.


§36-8-2. Presumptions of abandonment.

(a) Property is presumed abandoned if it is unclaimed by the apparent owner during the time set forth below for the particular property:

(1) Traveler's check, fifteen years after issuance;

(2) Money order, seven years after issuance;

(3) Stock or other equity interest in a business association or financial organization, including a security entitlement under article eight of the uniform commercial code, five years after the earlier of: (i) The date of the most recent dividend, stock split or other distribution unclaimed by the apparent owner; or (ii) the date of the second mailing of a statement of account or other notification or communication that was returned as undeliverable or after the holder discontinued mailings, notifications or communications to the apparent owner;

(4) Debt of a business association or financial organization, other than a bearer bond or an original issue discount bond, five years after the date of the most recent interest payment unclaimed by the apparent owner;

(5) A noninterest bearing demand, savings or time deposit, including a deposit that is automatically renewable, five years after the earlier of maturity or the date of the last indication by the owner of interest in the property; an interest bearing demand, savings or time deposit including a deposit that is automatically renewable, seven years after the earlier of maturity or the date of the last indication by the owner of interest in the property. A deposit that is automatically renewable is deemed matured for purposes of this section upon its initial date of maturity, unless the owner has consented to a renewal at or about the time of the renewal and the consent is in writing or is evidenced by a memorandum or other record on file with the holder;

(6) Money or credits owed to a customer as a result of a retail business transaction, three years after the obligation accrued;

(7) Gift certificate, three years after December 31, of the year in which the certificate was sold, but if redeemable in merchandise only, the amount abandoned is deemed to be sixty percent of the certificate's face value;

(8) Amount owed by an insurer on a life or endowment insurance policy or an annuity that has matured or terminated, three years after the obligation to pay arose or, in the case of a policy or annuity payable upon proof of death, three years after the insured has attained, or would have attained if living, the limiting age under the mortality table on which the reserve is based;

(9) Property distributable by a business association or financial organization in a course of dissolution, one year after the property becomes distributable;

(10) Property received by a court as proceeds of a class action, and not distributed pursuant to the judgment, one year after the distribution date;

(11) Property held by a court, government, governmental subdivision, agency or instrumentality, one year after the property becomes distributable;

(12) Wages or other compensation for personal services, one year after the compensation becomes payable;

(13) Deposit or refund owed to a subscriber by a utility, two years after the deposit or refund becomes payable;

(14) Property in an individual retirement account, defined benefit plan or other account or plan that is qualified for tax deferral under the income tax laws of the United States, three years after the earliest of the date of the distribution or attempted distribution of the property, the date of the required distribution as stated in the plan or trust agreement governing the plan, or the date, if determinable by the holder, specified in the income tax laws of the United States by which distribution of the property must begin in order to avoid a tax penalty;

(15) Warrants for payment issued by the State of West Virginia which have not been presented for payment, within six months of the date of issuance;

(16)  All funds held by a fiduciary, including the state Municipal Bond Commission, for the payment of a note, bond, debenture or other evidence or indebtedness, five years after the principal maturity date, or if such note, bond, debenture or evidence of indebtedness is called for redemption on an earlier date, then the redemption date, such premium or redemption date to also be applicable to all interest and premium, if any, attributable to such note, bond, debenture or other evidence of indebtedness; and

(17) All other property, five years after the owner's right to demand the property or after the obligation to pay or distribute the property arises, whichever first occurs.

(b) At the time that an interest is presumed abandoned under subsection (a) of this section, any other property right accrued or accruing to the owner as a result of the interest, and not previously presumed abandoned, is also presumed abandoned.

(c) Property is unclaimed if, for the applicable period set forth in subsection (a) of this section, the apparent owner has not communicated in writing or by other means reflected in a contemporaneous record prepared by or on behalf of the holder, with the holder concerning the property or the account in which the property is held, and has not otherwise indicated an interest in the property. A communication with an owner by a person other than the holder or its representative who has not in writing identified the property to the owner is not an indication of interest in the property by the owner.

(d) An indication of an owner's interest in property includes:

(1) The presentment of a check or other instrument of payment of a dividend or other distribution made with respect to an account or underlying stock or other interest in a business association or financial organization or, in the case of a distribution made by electronic or similar means, evidence that the distribution has been received;

(2) Owner-directed activity in the account in which the property is held, including a direction by the owner to increase, decrease or change the amount or type of property held in the account;

(3) The making of a deposit to or withdrawal from a bank account; and

(4) The payment of a premium with respect to a property interest in an insurance policy; but the application of an automatic premium loan provision or other nonforfeiture provision contained in an insurance policy does not prevent a policy from maturing or terminating if the insured has died or the insured or the beneficiary of the policy has otherwise become entitled to the proceeds before the depletion of the cash surrender value of a policy by the application of those provisions.

(e) Property is payable or distributable for purposes of this article notwithstanding the owner's failure to make demand or present an instrument or document otherwise required to obtain payment.

(f) Notwithstanding subsection (e) of this section or any other provision of this article:

(1) For purposes of subdivision (8), subsection (a) of this section, in the case of a life or endowment insurance policy or an annuity payable upon proof of death, the obligation to pay does not arise until after a claim is made with the insurer and due proof of death is received by the insurer, consistent with section fourteen, article thirteen, chapter thirty-three of this code; and

(2) Under circumstances where an insurer has not received both a claim and due proof of death, subdivision (8), subsection (a) of this section was never intended to mean and may not be interpreted to mean that the proceeds of a life or endowment insurance policy or annuity become presumed abandoned three years after the date of the insured’s death; rather, as stated in that subdivision, if unclaimed, such proceeds become presumed abandoned three years after the insured has attained, or would have attained if living, the limiting age under the mortality table on which the reserve is based.

(g) As subsection (f) of this section is intended to clarify the intent and meaning of this section, the amendments to this section made during the 2016 Legislative session are retroactive.


 

NOTE: The purpose of this bill is to clarify when proceeds of a life or endowment insurance policy or annuity may be presumed to be abandoned and to reverse the decision of the Supreme Court of Appeals in State of West Virginia ex rel. John D. Perdue v. Nationwide Life Insurance Company (June 16, 2015). This amendment would be retroactive and apply to all cases and controversies pending in any courts of this state on the date of enactment of this bill.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.

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