MK proposes national database for unclaimed monies at banks, insurers
All Israel's financial institutions will have to start listing unclaimed accounts and monies in a national database, if MK Moshe Kahlon has his way.
All Israel's financial institutions will have to start listing unclaimed accounts and monies in a national database, if MK Moshe Kahlon has his way. The Likud party parliamentarian's legislative proposal would apply to banks, insurance companies, provident funds and all other bodies that hold the public's money.
Kahlon proposes to establish a unit responsible for registering abandoned and unclaimed money in the database, which would be accessible to the general public free of charge. The Economic Affairs Committee approved his idea yesterday for presentation before the Knesset plenum.
According to a study by the Knesset's Information Center, hundreds of millions of shekels and possibly billions have been left bereft at various financial institutions, including in dormant bank accounts, a host of savings vehicles, unclaimed severance compensation, dividends from shares never collected, in pension funds, provident funds, study funds and life insurance policies.
Moreover, 45% of the 1.17 million pension accounts in Israel are defined as inactive. There is a lot of money out there waiting to be claimed. Yet, says Kahlon, reports from the financial institutions paint a "worrying picture of onerous bureaucracy," and it appears that they "are not making the proper effort to locate the owners of dormant accounts or their heirs."
Some complaints indicate that the institutions used the money themselves, the Knesset member says.
The Custodian General at the Justice Ministry, Shlomo Shahar, says he supports the law as long as manpower is allocated to enforce it. But Erez Kaminitz of the Justice Ministry's department of legislation thinks there's no need for any national body to handle abandoned money outside the Custodian General. The aspect of general access opens the door to abuse, he fears.
Tal Nadav of the Banks Association said that the banks support the proposal, and Knesset Economic Affairs Committee chairman Gilad Erdan asked the government to provide solid figures for the last ten years: How much unclaimed money is out there in how many accounts.