The Dormant Accounts Law, its regulations and subsequent amendments (collectively referred to as the 'Law'), requires certain financial institutions (‘account providers’) to transfer monies that are in dormant accounts in their institutions to the Government after seven years of account inactivity.
Only dormant accounts held by class A life insurers, banks, trust companies, credit unions and building societies are affected. However, the Governor in Cabinet can declare any other type of financial institution to be an account provider if he deems that to be in the national interest.
The Law sets out: the circumstances under which accounts will be considered dormant for the purposes of the Law; the procedures that account providers must follow to ensure account holders are notified and given opportunity to re-activate their accounts within the time specified in the Law; the time frame within which account providers must transfer, to the Government, monies in dormant accounts that meet the criteria for transfer, and the procedures and format for reporting.
Report - An account provider that transfers monies from a dormant account to the Government must submit a report to the Minister of Finance and to CIMA at the time of transfer (no later than 31 March each year). The format of this report and information to be included are set out in Form 2 of the Dormant Accounts (Forms) Regulations, as amended. If there are no dormant accounts, the account provider must still report this in writing to the Minister and CIMA by 31 March.
Certificate of Compliance - In addition to these reports, the account provider must submit, by 31 December each year) a certificate of compliance, attesting that the provider has complied with the requirements under the Law. The format is set out in Form 3 of the Dormant Accounts (Forms) Regulations, as amended.
CIMA’s authority under the Law is summarised below:
Receive account providers’ reports and certificates of compliance - See Account Providers' Reporting Requirements above.
Approve variation of interest payments and account charges - Unless it has CIMA’s approval, an account provider is not allowed to reduce the interest or dividends payable on a dormant account, or to make charges in excess of those applied to comparable active accounts, during the period of dormancy or at the time a payment or transfer of monies is required.
Authorise inspections & issue directions to account providers - CIMA has the power to authorise an inspector to carry out inspections to ensure that account providers are complying with the Law and that they have adequate systems, procedures and practices in place and are applying them adequately. Based on the findings of such inspections, CIMA is also authorised to give directions to the account provider, aimed at ensuring compliance with the Law or to rectify any defect observed.
Click the following link for more information on the Dormant Accounts Law. This pdf file includes information to help you meet the reporting requirements: