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KNAC surrenders Sh405m unclaimed assets to regulator

BUSINESS
By Jackson Okoth | October 7th 2014

Nairobi; Kenya: The collapsed Kenya National Assurance Limited (KNAC) is the first institution to transfer all unclaimed assets held within its books to the Unclaimed Financial Assets Authority (UFAA).

The defunct State-owned insurance firm had said in a public notice issued in March this year that more than 25,000 policy holders were yet to make their claims. The KNAC management added that if those yet to make claims to the Life Fund did not do so within 60 days, all unpaid amounts would be transferred to the newly established Unclaimed Financial Assets Authority.

"Kenya National has now completed the transfer process, which came to an end in June this year, and we expect more institutions to begin reporting when the November 1 deadline expires. The Secretariat is ready and we expect compliance and more reports on unclaimed assets, especially from the banking industry," UFAA chairman Vincent Kimosop told The Standard.

The law allows the National Treasury Cabinet Secretary to prescribe further classes of assets that can be claimed when abandoned.

As at March 20, 2014, a total of Sh3.9 billion in claims had been settled by KNAC while an estimated Sh405 million - still unclaimed  - is what KNAC is passing on to Authority. The 25,000 holders are mostly those with small policy holders of between Sh20,000 and Sh30,000. Out of 155,000 files, some 25,000 files are still outstanding.

Any funds held under life or endowment insurance policy, or annuity that has matured and remained unclaimed for more than two years after benefits became due, is what KNAC has surrendered to the Authority.

KNAC collapsed more than 15 years ago and its operations were taken over by an official receiver. KNAC (2001) Limited came into the picture to run the life fund and pay off policies that had either matured or had acquired some surrender value.

Apart from companies under liquidation, commercial banks could be holding the biggest chunk of unclaimed assets.

"The banking industry is already in the process of complying with Section 20 of the UFAA Act, which deals with reporting of assets presumed to be abandoned and duties of the assets holder," said Kimosop.

While the Authority is ready, Parliament is yet to discuss and approve the Statutory Instrument Act, 2013, the law that will create the necessary instruments and templates for reporting unclaimed assets as well as procedures to be followed before the Authority can settle a claim from any rightful owner of an unclaimed asset(s). "We expect full compliance when all the required rules and regulations are ready, possibly before the end of this month- Parliament having come back from the current recess," said Kimosop.

The Authority has set up its offices on the 2nd floor of Pacis Centre along Waiyaki way in Westlands, Nairobi

Assets that can be held by the authority as unclaimed, according to the UFAA Act, include travellers cheques, money orders, Cheques, drafts, or similar instruments, demand, savings or matured time deposits, life or endowment insurance policy or annuity contract.

Others are deposits for utility services, ownership interest, assets from dissolved business entities, assets held in fiduciary capacity, unpaid wages, assets held in safe deposit box or repository, assets held by court or State department.

The authority started recruiting a management team early this year, ready for commencement of reporting and remitting unclaimed monies from different institutions on November 1. It has also developed regulations to guide the institutions on reporting unclaimed assets.

A wide range of institutions hold huge amounts of money that has not been claimed by their clients.

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