Law changed on old accounts

| 26/11/2010

(CNS): Following the concerns raised by the financial services sector regarding the Dormant Accounts Law 2010 which government passed in July, amendments have now been made as a result of the issues raised by the sector. Government has now increased the dormancy period from 6 years to 7 years as well as the period of time which government will hold the funds in trust and has limited the scope of the type of financial institutions that will fall under the law as well as clarifying the notification requirements. Speaking in the Legislative Assembly this week the premier said the industry had made justifiable arguments for the changes as the law, designed to allow government to seize only abandoned cash was seen as too broad.

According to the industry the first version of the law captured instruments being used as part of long-term commercial transactions and experts argued that this was problematic for the trust industry. The original dormancy period of 6 years was also viewed as too short by international comparison.

The Financial Services Legislative Committee (FSLC) established a sub committee to work on changes to the law following the concerns raised by the finance sector stakeholders. As a result the new law now limits the scope of the financial institutions to only include Class ‘A’ insurers; Banks, credit unions and building societies; trust companies established specifically to deal with dormant accounts from banks that were closed; and any other type of financial institution which is declared relevant by the Cabinet.

The increase in the dormancy period by one year brings Cayman in line with the time frames of the Bahamas and the BVI. However, most European countries use a dormancy period of between 12 and 15 years and some industry players had asked for at least ten years.

The removal of the reference to the Limitations Law, and instead reference the Public Management and Finance Law (2010 Revision) now provides that monies transferred to government will be held in trust for an additional six years. Further clarity on the notification requirements that account providers will have to implement has also been given in the amended law.

“These amendments clarify several issues that would allow these institutions to be in compliance with the original intent of the law – the transfer of monies held in abandoned accounts to the government,” the premier said as he presented the amendments to the LA. He said the changes focus on the concept of abandoned property and provide for a more limited scope,minimising unintended consequences.

“It is unfortunate that several unanticipated difficulties arose in the initial law that was passed,” he added. “It was not as a result of lack of effort on the part of my ministry to ensure that private sector concerns were adequately addressed. We have been open and transparent in this process with the financial industry and will continue to do so to ensure the success of this industry.”

With greater clarity the premier said he believed investors, clients and international stakeholders would be assured as a result of the.

See amended law

 

Print Friendly, PDF & Email

Category: Business

Comments (2)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    According to the article, this means that the time period is effectively 13years since the new 7years plus 6 held in trust by the government before they can access the funds.

  2. Anonymous says:

    From 6 years to 7 years is an amendment? Give me a break.this man takes everybody for an idiot.

    to 15 to 20   years is more reasonable. Certainly not 6 or 7 years. My God tha’ts like making a deposit yesterday !.   A   C.O.D.  is just getting warmed up after 5-7 years. what is wrong with this man’s fingers, is there Glue stuck to it?

    Banks, Institutions, Chamber of Commerse, Caymanianians NO ONE SHOULD LET THE PREMIER GET AWAY WITH THIS.

    Just Because the Bahamas is claiming after 7 years DOES NOT MAKE IT RIGHT!  I talk to Bahamians and they are doing very bad, the Government there is NOT LOOKING OUT FOR ITS PEOPLE, THE SAME AS IN THE CAYMAN ISLANDS.   SO TRY ANOTHER MODEL PLEASE!

    Not the Bahamas!

     6-7 years is NOT AN AMENDMENT AND IS UNACCEPTABLE. WE MUST FORCE THEM TO GO BACK TO THE DRAWING TABLE.! I’m surprised  the PPM opposition said nothing about this!

    Alden McLaughlin, this is the CRIME AGAINST OUR PEOPLE THAT YOU SHOULD EARMARK AS AN ONSLAUGHT AGAINST THE LIVELIHOOD OF OUR PEOPLE IN THAT THEIR LIFE SAVINGS WILL BE SNATCHED BY THE DICTATORSHIP  SNATCHMAN!

    Alden and kurt and the rest of You Especially Ezzard what are you all good for?  If you can’t save our bank accounts, its no use running for office, this is really going to put a sour taste in the mouths of everyone.

    Caymanians are you going to allow the Premier to take your CHILD’S COLLEGE FUND?! or are you going to fight him?

    7 years is the average time one saves for a house or a good car or and education fund!  Why would you let this unscrupulous premier talk you out of your money into the pockets of a UDP  government?!

    HAVE YOU ALL TAKEN LEAVE OF YOURSENSES?

    TIME TO MARCH!