Only 2.6 percent of dormant accounts were reclaimed
Banks and other account holding institutions have transferred CI$12.88 million from dormant accounts to the government during the past three years.
In total, the Cayman Islands government received the assets of 5,784 dormant accounts since the Dormant Accounts Law was passed in 2010. The largest amount in a single dormant account was just under US$800,000, while on average dormant accounts contained a value of CI$2,226.84, according to the financial secretary’s office.
An account is considered dormant if there has been no activity in the account and no contact with the account holder for seven years. Account holding institutions like banks, trust companies, credit unions, building societies and insurers have to notify the Cayman Islands Monetary Authority that a dormant account exists by March 31 each year.
They then have to inform the dormant account holder by July 31 that unless a response is received, or there has been activity in the account by Dec. 31 of the same year, the institution will transfer the account to the government.
Once the funds from a dormant account have been transferred, the account holder can no longer reclaim the funds from the account provider but instead has to make a claim with government’s Treasury Department.
Only about 2.6 percent of the funds transferred to government were reclaimed by the account holders during the past three years. This produced a windfall of CI$1.61 million for government in 2011/12 and CI$1.98 million in 2012/13 as of Sept. 20.
This followed an initial intake of CI$9.63 million in the first year 2010/11 covering all previous decades.
The Ministry of Finance could not provide details as to when the accounts were opened, but an analysis of dormant account details published by banks in the Cayman Islands Gazettes shows that more than half of these accounts were opened in the 1990s. Less than a third was opened in the 2000s, and the remainder stem from the 1980s, with only a handful of dormant accounts going as far back as the 1970s.
The majority of dormant accounts assets was denominated in U.S. dollars (85.5 percent), followed by CI dollars (9.1 percent), Canadian dollars (3.25 percent), euro (1.25 percent) and pound sterling (0.85 percent).
Dormant property that is not cash, for example securities, has to be sold by the account provider at fair market value. The proceeds are then transferred to government. The law also covers safe-deposit boxes, but only cash and proceeds of the sale of precious metals and gemstones have to be transferred to government.
Government did not provide a breakdown of dormant accounts per bank, citing confidentiality reasons, but a previous Freedom of Information request in 2011 showed that seven banks – Butterfield Bank, Cayman National, FirstCaribbean, Royal Bank of Canada, Fidelity Bank, Bank of Bermuda [Cayman] Ltd. and State Street Bank and Trust – held more than 83 percent of all dormant accounts in terms of value.