Overview

The Dormant Assets Bill expands the existing scheme for handling dormant assets (like forgotten bank accounts) to include various other financial products, such as long-term insurance policies, pensions, investments, and client money held by investment institutions. It aims to release these funds for socially beneficial purposes while ensuring rightful owners can still reclaim their money.

Description

This bill significantly broadens the scope of the dormant assets scheme, currently focused on forgotten bank and building society accounts. It adds provisions for:

New Asset Categories:

• Long-term insurance assets: Unclaimed proceeds from long-term insurance policies (excluding with-profits, industrial assurance, and those held in trust).
• Pension assets: Unclaimed pension benefits from personal pension schemes.
• Investment assets: Unclaimed amounts from collective scheme investments (e.g., unit trusts, OEICs).
• Client money assets: Unclaimed client money held by investment institutions.
• Securities assets: Unclaimed proceeds from shares in publicly traded companies.

The bill defines "dormant" differently for each asset type, generally based on a period of inactivity (e.g., 6-12 years) and a lack of communication from the owner or their representatives. It establishes processes for institutions to transfer these dormant assets to an authorized reclaim fund, which then distributes the funds for social and environmental purposes. The bill also includes provisions for dealing with unwanted assets, where owners actively wish to donate the asset; provisions for third-party rights; and a mechanism for returning surplus assets to smaller banks and building societies under the alternative scheme.

The bill introduces regulatory powers for the government to add further asset categories to the scheme in the future. Regular reviews and reports to Parliament on the scheme's operation are mandated.

Government Spending

The bill doesn't directly involve significant government spending. However, it facilitates the transfer of dormant assets to a reclaim fund, and potential Treasury loans to the fund if it faces financial difficulties are allowed, requiring parliamentary approval. The funds from dormant assets are distributed for social and environmental purposes.

Groups Affected

• Financial institutions: Banks, building societies, insurance companies, pension providers, and investment firms will be responsible for identifying and transferring dormant assets.
• Individuals: Owners of dormant assets may lose access to their funds if they fail to claim them within the defined dormant periods.
• Charities and social enterprises: These organizations will benefit from the redistribution of dormant assets for socially beneficial purposes.
• Government: The government will have increased regulatory oversight and responsibilities.

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