Delaware General Assembly


CHAPTER 568

ESCHEATS

AN ACT TO AMEND CHAPTER 11, TITLE 12, DELAWARE CODE, ENTITLED ESCHEATS PERTAINING TO UNCLAIMED LIFE INSURANCE FUNDS.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Chapter 11, Title 12, Delaware Code, is amended by adding the following new subchapter:

SUBCHAPTER III. UNCLAIMED LIFE INSURANCE FUNDS § 1180. Scope

This subchapter shall apply to unclaimed funds, as defined in section 1181 hereof, of any life insurance company doing business in this State where the last known address, according to the records of such company, of the person entitled to such funds is within this State, provided that if a person other than the insured or annuitant be entitled to such funds and no address of such person be known to such company or if it be not definite and certain from the records of such company what person is entitled to such funds, then in either event it shall be presumed for the purposes of this subchapter that the last known address of the person entitled to such funds is the same as the last known address of the insured or annuitant according to the records of such company.

§ 1181. Definitions

The term "unclaimed funds" as used in this subchapter means and includes all monies held and owing by any life insurance company doing business in this State which shall have remained unclaimed and unpaid for seven years or more after it is established from the records of such company that such monies became due and payable under any life or endowment insurance policy or annuity contract which has matured or terminated. A life insurance policy not matured by actual proof of the prior death of the insured shall be deemed to be matured and the proceeds thereof shall be deemed to be "due and payable" within the meaning of this subchapter if such policy is in force when the insured shall have attained the limiting age under the mortality table on which the reserve is based. Monies otherwise admittedly due and payable shall be deemed to be "held and owing" within the meaning of this subchapter although the policy or contract shall not have been surrendered as required.

§ 1182. Annual report of unclaimed funds

(a) Every such life insurance company shall on or before the first day of May of each year make a report in writing to the State Escheator of all unclaimed funds, as hereinbefore defined, held and owing by it on the thirty-first day of December next preceding, provided, however, such report shall not be required to include amounts of less than five dollars which on the effective date of this subchapter shall have been unclaimed and unpaid for more than ten years, or amounts which have been paid to another state or jurisdiction prior to the effective date of this subchapter.

(b) Such report shall be signed and sworn to by an officer of such company and shall set forth:

1. In alphabetical order the full name of the insured or annuitant, his last known address according to the company's records, and the policy or contract number ;

2. The amount appearing from the company's records to be due on such policy or contract;

3. The date such unclaimed funds became payable ;

4. The name and last known address of each beneficiary or other person who, according to the company's records, may have an interest in such unclaimed funds; and

5. Such other identifying information as the State Escheator may require.

§ 1183. Publication of list of unclaimed funds

(a) On or before the first day of September following the making of such reports under section 1182, every such life insurance company shall cause to be published notices based on the information contained in such reports and entitled: "NOTICE OF CERTAIN UNCLAIMED FUNDS HELD AND OWING BY LIFE INSURANCE COMPANIES."

(b) For all unclaimed funds payable to a person appearing to be entitled to such funds whose last known address is located in New Castle County, such notice shall be published at least twice in a daily newspaper published in that county. For all unclaimed funds payable where such last known address is located in Kent County or Sussex County, such notice shall be published at least once in a newspaper published at least weekly in the county in which unclaimed funds are payable.

(c) Each such notice shall set forth in alphabetical order the names of the insureds or annuitants under policies or contracts where the last known address of the person appearing to be entitled to such funds is in the county of publication, together with :

1. The amount reported due and the date it became payable;

2. The name and last known address of each beneficiary or other person who, according to the company's reports, may have an interest in such unclaimed funds; and

1. The name and address of the company.

The notice shall also state that such unclaimed funds will be paid by the company to persons establishing to its satisfaction before the following first day of December their right to receive the same, and that not later than the following twentieth day of December such unclaimed funds still remaining will be paid to the State Escheator who shall thereafter be liable for the payment thereof.

(d) Publication as required herein may be waived in the discretion of the State Escheator where the amount involved in a particular policy or contract does not exceed $50.

§ 1184. Payment for publication

Any amounts paid by a life insurance company to newspapers for any publication of names as required by this subchapter may be charged against all unclaimed funds held or owing by such life insurance company at the time of such publication.

§ 1185. Payment to State Escheator

(a) All unclaimed funds contained in the report required to be filed by section 1182 of this subchapter, excepting those which have ceased to be unclaimed funds, less the amount paid for publication under section 1184, shall be paid over to the State Escheator on or before the following twentieth day of December.

(b) The State Escheator shall have the power, for cause shown, to extend for a period of not more than one year the time within which a life insurance company shall file any report and in such event the time for publication and payment required by this subchapter shall be extended for a like period.

§ 1186. Custody of unclaimed funds in State; insurers indemnified

Upon the payment of such unclaimed funds to the State Escheator, the State of Delaware shall assume, for the benefit of those entitled to receive the same and for the safety of the money so paid, the custody of such unclaimed funds, and the life insurance company making such payment shall immediately and thereafter be relieved of and held harmless by the State from any and all liability for any claim or claims which exist at such time with reference to such unclaimed funds or which thereafter may be made or may come into existence on account of or in respect to any such unclaimed funds.

§ 1187. Reimbursement for claims paid by insurers

Any life insurance company which has paid monies to the State Escheator pursuant to the provisions of this subchapter may make payment to any person appearing to such company, in accordance with its customary rules and regulations govern-

ing the payment of claims, to be entitled thereto and upon proof of such payment the State Escheator shall forthwith reimburse such company for such payment out of the Special Trust Fund in his custody or, in the event such Special Trust Fund shall be insufficient, out of the General Fund of the State.

§ 1188. Special trust fund; administration

Upon receipt of any unclaimed funds from life insurance companies by the State Escheator, he shall pay forthwith three-fourths of the amount thereof into the General Fund for the use of the State. The remaining one-fourth shall be administered by him as a Special Trust Fund for the purposes of this subchapter, and deposited in a separate account in the Farmer'S Bank of the State of Delaware. At the end of each calendar year, any unclaimed funds which shall have been a part of such Special Trust Fund for a period of seven years or more shall be paid into the General Fund for the use of the State, provided that the Special Trust Fund shall never be so reduced to less than twenty thousand dollars.

§ 1189. Determination and review of claims

(a) Any person claiming to be entitled to unclaimed funds paid to the State Escheator may file a claim at any time with such official. The State Escheator shall possess full and complete authority to accept or reject any such claim. If he rejects such claim or fails to act thereon within 90 days after receipt of such claim, the claimant may within four months thereafter apply for a hearing and determination of his claim by the State Tax Board. The procedure before the State Tax Board for such hearing shall be the same as that provided for by section 326 (a) and (b) of Title 30; and the Board shall have the same power to compel the attendance of witnesses and the production of evidence as is provided in section 326 of Title 30.

(b) Within thirty days after notice of a decision upon such hearing, the State Escheator or any claimant may appeal such decision to the Court of Chancery, upon notice to all parties to the proceedings before the State Tax Board, and upon such other notice as the Court of Chancery may order.

(c) The Court of Chancery may make such rules as it may deem proper for the perfection, hearing and determination of such appeals.

§ 1190. Payment of allowed claims

Any claim which is accepted by the State Escheator or ordered to be paid by him by the State Tax Board or the Court of Chancery shall be paid out of the Special Trust Fund in his custody or, in the event such Special Trust Fund shall be insufficient, it shall be paid out of the General Fund.

§ 1191. Records required

The State Escheator shall keep in his office a public record of each payment of unclaimed funds received by him from any life insurance company. Such record shall show in alphabetical order the name and last known address of each insured or annuitant, and of each beneficiary or other person who, according to the company's reports, may have an interest in such unclaimed funds, and with respect to each policy or contract, its number, the name of the company, and the amount due.

§ 1192. Other acts not applicable

No other provisions of this Code relating to escheat or abandoned or unclaimed funds shall apply to life insurance companies, nor shall any statute hereafter enacted so apply unless specifically made applicable by its terms.

§ 1193. Penalty for failure to report or file

Any life insurance company failing to make any report required by the subchapter shall forfeit to the State of Delaware the sum of one hundred dollars for each day such report shall be delayed or withheld, except that the State Escheator may extend the time for making any such report or filing any such affidavit and may waive the payment of any penalty or part thereof provided for by this section.

§ 1194. Penalty for fraudulent returns

The making of a willful false oath in any report required under the provisions of this subchapter shall be perjury and punishable as such according to law.

Approved February 29, 1956.