MS 2022-11-D-McRae-November-22-2022-Uniform-Disposition-of-Unclaimed-Property-Act November 22, 2022

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

Short answer: No. The Mississippi Unclaimed Property Act (§ 89-12-1 et seq.) was amended in 2006 to exclude 'future or prior dividends' made by self-insured workers' compensation groups from the definition of intangible personal property. Such dividends are not required to be remitted to the State Treasurer.

Disclaimer: This is an official Mississippi Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Mississippi attorney for advice on your specific situation.

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

Unclaimed dividends are not subject to the Unclaimed Property Act. You do not have to remit them to the State Treasurer as unclaimed property. That is true whether the dividend is past or future. Document the basis for non-remittance in writing as part of your wind-down records. If you are holding "other funds" beyond dividends, those need separate analysis under the Act.

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

The group is the entity holding your money. The Unclaimed Property Act exclusion means the State Treasurer is not your search target; the group itself is. Contact the group administrator. If the group has wound down completely, the trail may pass through whatever entity took over wind-down responsibilities under the joint agreement.

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

Self-insured workers' compensation group dividends are not part of the unclaimed-property pipeline. If a group attempts to remit such dividends to your office, the McRae opinion supports declining receipt and directing the group back to its own dispositional procedures.

If you advise corporations or workers'-compensation administrators

The 2006 carve-out is specific to "future or prior dividends" of self-insured workers' compensation groups with joint-and-several liability. Other intangible property remains subject to the Act. If the group becomes a different kind of entity (a regular insurance corporation, for example), the Act applies in full.

Common questions

Q: Why is there a carve-out for these specific groups?
A: Self-insured workers' comp groups with joint-and-several liability operate as risk-sharing pools rather than commercial insurers. The 2006 amendment recognized that their dividend mechanics (per coverage year, with rotating membership) do not fit the standard unclaimed-property framework. Putting the dividends in the unclaimed-property pipeline would mismatch the actual flow of money.

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 McRae opinion expressly does not address "other funds" held by the group. Those would need separate analysis. Talk to counsel and the State Treasurer's office.

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. The group's bylaws, joint agreement, or wind-down plan would determine how unclaimed dividends are handled (reverting to the group, paying to remaining members, etc.).

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

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