What you need to know:
- Anyone is now allowed to claim the idle assets upon presenting proof of representation of the missing account owners to the Unclaimed Financial Assets Authority.
- Unclaimed assets include sums payable on travelers cheques, money orders, cheques, drafts, and other instruments that are outstanding for over two years.
The Treasury has cleared claimants of dormant financial assets and accounts held by the State to nominate other beneficiaries of the idle cash, shares, and dividends — a move aimed at unlocking billions of shillings in unclaimed assets.
Fresh regulations published by Treasury Cabinet Secretary Njuguna Ndung’u said anyone is now allowed to claim the idle assets upon presenting proof of representation of the missing account owners to the Unclaimed Financial Assets Authority (Ufaa).
“A person who claims ownership of any asset held by the authority shall submit to the authority a duly completed form provided by the authority, signed by the claimant or by such a person authorised to sign on the claimant’s behalf and witnessed by a person who need not to be a judicial officer or legal practitioner,” said Prof Ndung’u.
The new rules, which stem from the Finance Act 2023, also allow claimants to present letters of administration or grant of probate, a certificate of summary administration issued under the Public Trustee Act, or power of attorney or court order.
The Finance Act 2023 made changes to the Unclaimed Financial Assets Act, of 2011 to increase the number of persons entitled to receive payment or delivery of assets in dormant financial accounts.
Unclaimed assets include sums payable on travelers cheques, money orders, cheques, drafts, and other instruments that are outstanding for over two years.
They also include demand, savings, and time deposits in banks that have been left idle for more than five years, and life or endowment insurance policies or annuity contracts that have matured or terminated if unclaimed for more than two years after the funds became due and payable.
The Unclaimed Financial Assets Act, of 2011 had previously limited claims from dormant accounts to one person — a stance that has been blamed for slowed transmission of dormant assets leading to a huge stockpile of idle cash held by Ufaa.
The law change will see rightful claimants who are sick, incapacitated, outside the country, or in any way unable to claim their assets to designate another person to receive the assets on their behalf - boosting payouts of unclaimed assets.
Chocked by a stockpile of unclaimed assets, Ufaa is considering converting non-cash unclaimed assets into cash in a bid to expedite the reunification of the assets with their rightful heirs.
Ufaa said that by December last year, it had received unclaimed financial assets worth Sh55.6 billion including Sh27.28 billion in cash and Sh28.32 billion in shares.
“The authority will explore the option of converting non-cash unclaimed assets in cash equivalent (especially shares and safe deposit contents),” says Ufaa.
The largest share of the unclaimed assets was remitted to Ufaa by banks (67.7 per cent), listed companies (16.9 per cent), telecoms operators (9.3 per cent), insurance companies (5.3 per cent), other sources (0.3 per cent), pension funds (0.1 per cent) and saccos (0.3 per cent).
The agency says it is harder to reconcile non-cash assets to their rightful owners compared to cash assets. Its figures show that the rate of reunification of non-cash assets is at 3.7 per cent and a much higher success rate of 5.7 per cent for cash assets.
This has prompted it to consider converting some of these assets, especially shares and valuables in safe deposit boxes cash by selling them.
Individuals store a wide array of valuables in safe deposit boxes including jewellery, precious metals, artwork, important documents, cash, heirlooms, firearms, and valuable collectibles.
As of December 2022, some 147,509,713 shares and 3,658 safe deposit boxes had been surrendered to the Authority.