Do unpaid dividends from a self-insured workers' comp group have to be remitted to the Mississippi State Treasurer as unclaimed property?

Plain-English summary

Mississippi's State Treasurer asked the AG a workers'-compensation question. A self-insured workers' compensation group with joint-and-several liability was winding down. After all claims were closed for each "coverage year," any surplus cash got distributed to the members from that coverage year. Membership turnover meant some former members were unreachable. The group asked the Treasurer whether unclaimed dividends had to be reported and remitted under the Mississippi Uniform Disposition of Unclaimed Property Act.

The AG: no.

The 2006 amendment to § 89-12-3 added a deliberate carve-out. § 89-12-3(f)(ii) defines "intangible personal property" but explicitly excludes "future or prior dividends made by the workers' compensation groups or associations described in paragraph (e)." § 89-12-3(e) defines "insurance corporation" and specifies that the term "does not include self-insured workers' compensation groups or associations comprised of members who have joint and several liability for the workers' compensation obligation of the other members."

Together, those carve-outs mean that the standard reporting and remittance requirements under § 89-12-23(1) and § 89-12-29 do not apply to dividends from these specific self-insured groups. The opinion is narrowly written: it addresses only dividends, not "other funds" the groups might hold, which would require their own analysis.

What this means for you

If you administer a Mississippi self-insured workers' compensation group with joint-and-several liability

Under the opinion, future or prior dividends made by these self-insured workers' compensation groups are not "intangible personal property" under § 89-12-3(f)(ii), so the report-and-remit requirements of §§ 89-12-23(1) and 89-12-29 do not apply to them. The opinion is explicit that whether "other funds" the group may hold are reportable is "beyond the scope of this opinion."

If you are a former member of such a group with unclaimed dividends owed to you

The opinion holds these dividends are not remitted to the State Treasurer as unclaimed property, so they would not appear in the Treasurer's unclaimed-property system. The opinion does not address how or where an unlocatable former member would otherwise recover a dividend.

If you serve in the State Treasurer's office handling unclaimed property

The opinion concludes that the statutory requirements to report and remit intangible property presumed abandoned do not apply to future or prior dividends made by these self-insured workers' compensation groups.

If you advise corporations or workers'-compensation administrators

The exclusion is specific to "future or prior dividends" of self-insured workers' compensation groups whose members have joint and several liability. The opinion notes § 89-12-3(e) excludes such groups from "insurance corporation" status; a commercial insurer's unclaimed obligations are not within that exclusion.

Common questions

Q: Where does the carve-out come from?
A: The opinion explains that § 89-12-3(f)(ii) was amended in 2006 to state that "future or prior dividends made by the workers' compensation groups or associations described in paragraph (e)" are excepted from the definition of "intangible personal property." The opinion applies that text; it does not give the legislature's reasons for the amendment.

Q: Does this apply to ordinary commercial workers' compensation insurance? A: No. § 89-12-3(e)'s exclusion is specifically for self-insured groups with joint-and-several liability among members. A commercial insurer's unclaimed obligations follow the regular Act framework.

Q: What about unclaimed claim payments owed to injured workers? A: The opinion is about dividends paid to group members. Claim payments owed to injured workers are different in character. The opinion does not address them.

Q: What if the group is winding down and has cash that doesn't fit any defined category? A: The opinion expressly leaves that open. It states whether "other funds" held by these groups must be reported and remitted under §§ 89-12-29 and 89-12-23 is "beyond the scope of this opinion."

Q: Is the carve-out unique to Mississippi?
A: The Uniform Disposition of Unclaimed Property Act has analogues in many states, but each state can amend its version differently. The 2006 Mississippi amendment is the specific basis for this carve-out. Workers' comp groups operating across states should check each jurisdiction.

Q: What should the group do with the unclaimed dividends? A: The opinion does not direct disposition. It resolves only that these dividends are not required to be reported or remitted to the State Treasurer as unclaimed property.

Background and statutory framework

Mississippi's Uniform Disposition of Unclaimed Property Act (Title 89, Chapter 12) follows the standard model: private holders of unclaimed property must report and remit it to the State Treasurer after a presumption-of-abandonment period. The state then holds the property in trust and pays it to claimants who come forward. The Act covers a broad category of "intangible personal property."

The 2006 amendment surgically removed self-insured workers' comp group dividends from the covered category. The amendment came in two parts: (e) excluding such groups from "insurance corporation" status, and (f)(ii) excluding "future or prior dividends" of those groups from "intangible personal property." Reading them together gives the McRae opinion its clean answer.

Citations

• Miss. Code Ann. § 89-12-1 et seq. (Uniform Disposition of Unclaimed Property Act)
• Miss. Code Ann. § 89-12-3(e) (definition of insurance corporation, excluding self-insured WC groups)
• Miss. Code Ann. § 89-12-3(f)(ii) (definition of intangible personal property, excluding WC group dividends)
• Miss. Code Ann. § 89-12-23(1) (reporting requirement)
• Miss. Code Ann. § 89-12-29 (delivery to Treasurer)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2022/11/D.McRae-November-22-2022-Uniform-Disposition-of-Unclaimed-Property-Act.pdf

Original opinion text

November 22, 2022
The Honorable David McRae
State Treasurer
Post Office Box 138
Jackson, Mississippi 39205
Re:

Uniform Disposition of Unclaimed Property Act

Dear Treasurer McRae:
The Office of the Attorney General has received your request for an official opinion.

Background
You provide the following background in your request:
The Office of the State Treasurer has been contacted by a certain self-insured workers' compensation group comprised of members who have joint and several liability for the workers' compensation obligations of the other members. The group has ceased its risk-sharing activities and is in the process of winding down, liquidating and disbursing assets. For each "coverage year" during which such group was in existence, the membership of the group may, and likely did, differ, and the profitability of the group differed based on loss experienced during that "coverage year." As a result, each "coverage year" stands alone in terms of determining available surplus cash to be distributed for that "coverage year" once all claims related to that "coverage year" are closed out. Also, each "coverage year" stands alone in terms of the members to whom distributions of surplus cash shall be made for that "coverage year." As a result of membership turnover and the delayed determination of distributable cash from a "coverage year" until all claims for that year are closed out, it is not uncommon for self-insured workers' compensation groups to accumulate unclaimed dividends otherwise payable to past members of the group who, despite the group's best efforts, cannot be located. One such group has contacted the Office of the State Treasurer for guidance on whether such unclaimed dividends constitute unclaimed property to be remitted to the Office of the State Treasurer pursuant to the Uniform Disposition of Unclaimed Property Act, codified in Section 89-12-1 et seq.

Question Presented
Does Mississippi law require self-insured workers' compensation groups or associations comprised of members who have joint and several liability for the workers' compensation obligations of the other members to report and remit or deliver to the Treasurer all future and prior dividends declared and paid by such groups or associations that are unclaimed by the member payee? Brief Response

The Uniform Disposition of Unclaimed Property Act, codified in Sections 89-12-1 et seq. of the Mississippi Code, does not require self-insured workers' compensation groups or associations comprised of members who have joint and several liability for the workers' compensation obligation of the other members to report or remit to the Treasurer intangible personal property presumed abandoned. Applicable Law and Discussion Sections 89-12-23(1) and 89-12-29 provide that every person holding funds or other intangible personal property that is presumed abandoned must report and deliver such property to the Treasurer. The definition of the term "intangible personal property" provided in Section 89-12-3(f)(ii) was amended in 2006 to explicitly state that "future or prior dividends made by the workers' compensation groups or associations described in paragraph (e)" are excepted from the definition of the term. Subsection (e) defines "insurance corporation" and provides that the term "does not include self-insured workers' compensation groups or associations comprised of members who have joint and several liability for the workers' compensation obligation of the other members." Based on those definitions, it is the opinion of this office that the statutory requirements to report and remit intangible property presumed abandoned do not apply to future or prior dividends made by self-insured workers' compensation groups or associations comprised of members who have joint and several liability for the workers' compensation obligation of other members. Whether "other funds" that may be held by the relevant groups are required to be reported and remitted pursuant to Sections 89-12-29(1) and 89-12-23 is beyond the scope of this opinion. If this office may be of any further assistance to you, please do not hesitate to contact us. Sincerely, LYNN FITCH, ATTORNEY GENERAL By:

/s/ Abigail C. Overby
Abigail C. Overby
Special Assistant Attorney General