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State gazettes proposed law on unclaimed assets

By | April 16th 2011 at 00:00:00 GMT +0300

By Jackson Okoth

A new law designed to deal with a mounting heap of unclaimed financial assets currently held by commercial banks, insurance firms, stockbrokers, pension funds managers and the state law office, will soon be in place. That is if the Unclaimed Financial Assets Bill 2011, already published — and set to be introduced into the floor of parliament — is passed into law.

Contents of this proposed law are contained in the Kenya Gazette Supplement No.25 (Bills No. 7), published on April 8.

The proposed law is to be introduced onto the floor of the house by Laisamis Member of Parliament, Joseph Lekuton. The objective of the bill is to provide a legal framework for dealing with unclaimed financial assets. The need for such a law has been occasioned by colossal sums of money represented as unclaimed assets held by financial and other institutions in Kenya.

If this bill is passed, an Act of parliament will be put in place to provide for reporting and dealing with unclaimed financial assets. The Act will also establish the Unclaimed Financial Assets Authority, and the Unclaimed Financial Assets Trust Fund. Under the proposed law, all unclaimed assets would be placed in the custody of the Unclaimed Financial Assets Authority.

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What are unclaimed assets

The list of what is defined as unclaimed financial assets in the proposed law includes travellers’ cheques, money orders, cheques, drafts, demand and savings or matured time deposits with a bank or financial institution. Other financial assets include life or endowment insurance policies or annuity contracts, deposit for utility services, ownership of any shares, stocks, or ownership interest in a business.

The list of other financial assets to be covered under this proposed law include assets from dissolved business entity, assets held in fiduciary capacity, or in safe deposit box or repository, as well as assets held by Court or Government department.

Unpaid wages, including wages, represented by unpresented payroll cheques, allowances, bonuses and terminal benefits that remained unclaimed by the owner for more than one year after becoming payable will also be presumed abandoned.

The board manning the Unclaimed Financial Assets Authority will be comprised of five people appointed by the Minister for Finance, and the Treasury Permanent Secretary and a Chief Executive Officer. The new law also proposes establishment of the Unclaimed Financial Assets Trust Fund, into which all monies that become, or are deemed to be unclaimed assets, are paid into.

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