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Delaware General AssemblyDelaware RegulationsMonthly Register of RegulationsOctober 2017

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On January 29, 2015, the Governor of Delaware signed into law Senate Bill 11 of the 148th General Assembly, which directed the Delaware Secretary of Finance to complete the development of a detailed manual containing procedural guidelines for the conduct of Delaware unclaimed property examinations. On February 2, 2017, the Governor signed into law Senate Bill 13 of the 149th General Assembly, which revised and updated the Delaware Abandoned or Unclaimed Property Law. Section 1176(b) directed the Secretary of Finance, in consultation with the Secretary of State, to promulgate regulations to create consistency in any examination or voluntary disclosure. On June 29, 2017, the Governor signed into law Senate Substitute 1 for Senate Bill 79, which further updated the Delaware Abandoned or Unclaimed Property Law and clarified portions of Senate Bill 13.
THEREFORE IT IS ORDERED that the following Regulation 104, Department of Finance Abandoned or Unclaimed Property Reporting and Examination Manual is adopted and shall be final effective October 11, 2017 and shall apply to all reporting and examinations not complete as of that date.
12 Del.C. §1132 Rule-making.
12 DE Admin. Code 100, Regulation on Practices and Procedures for Appeals of Determinations of the Audit Manager
12 DE Admin. Code 101, Regulation on Practice and Procedure for Establishing Running of the Full Period of Dormancy for Certain Securities and Related Property
12 DE Admin. Code 102, Regulation on Practices and Procedures for Records Examinations by the State Escheator
12 DE Admin. Code 103, Abandoned or Unclaimed Property Examination Guidelines
Abandoned or Unclaimed Property Voluntary Disclosure Agreement and Audit Program, 9 DE Reg. 771 (11/01/05).
Abandoned or Unclaimed Property Voluntary Disclosure Agreement Program, 10 DE Reg. 699 (10/01/06) (Final).
Regulation on Practice and Procedure for Establishing Running of the Full Period of Dormancy for Certain Securities and Related Property,15 DE Reg. 1330 (03/01/12).
Regulation on Practices and Procedures for Records Examinations by the State Escheator, 16 DE Reg. 530 (11/01/12) (Final).
Abandoned or Unclaimed Property Audit Examination Guidelines, 16 DE Reg. 630 (12/01/12) (Final).
1.2 Contact Information for Owners and Claims
2.1 Preface
2.2 Guiding Principles
2.3 Effective Date
2.4 When property presumed abandoned
Line 2 COGS
+ Line 27 Total Deductions
- Line 19 Charitable Contributions
- Line 20 Depreciation
- Line 21 Depletion
Maximum Cost in Dollars
2.5 Indication of Owner Interest in the Property
2.6 Report Required by Holder
2.7 When Report to be Filed
2.8 Address of owner to establish priority
2.9 Retention of Records by Holder
2.10 Authority to Conduct Abandoned Property Examinations
2.11 Examination of Holders
2.12 Notice of Examination
Dear [Holder Representative]:
The State is hereby requesting that you issue a hold notice so that all records are retained, including, but not limited to, bank statements, bank reconciliations, outstanding check lists, detail general ledgers, aged accounts receivable reports, aged accounts payable reports, and if applicable, information surrounding gift card issuances and redemptions. The State requests that all records will be retained, notwithstanding any [Company Name] record retention policies to the contrary, until the examination is completed. See 12 Del.C. §1145. Your cooperation in making necessary records available for both past and present years for the purposes of determining [Company Name] compliance with the Law will facilitate the completion of the examination. In addition to specific document requests that will be forthcoming, please have available all of [Company Name] prior years' reports of unclaimed property and supporting documentation for all states, including Delaware. You will be advised throughout the course of the examination of what records will be required to complete the review.
2.13 Third-Party Advocates
2.14 Confidentiality and Non-Disclosure Agreement ("NDA")
1. Introduction. [AUDITOR NAME] is a contract auditor that has been authorized to conduct an unclaimed property examination (the "Examination") of the Holder by the state(s) identified on Exhibit A (hereinafter a "Participating State" or collectively, the "Participating States," and shall, upon written consent of the Holder, include any additional state or jurisdiction that may, during the course of the Examination, authorize [AUDITOR NAME] to act as its agent and to perform an unclaimed property examination of the Holder) to determine the Holder's compliance with the Participating State(s)' unclaimed property laws, rules, and regulations. Upon receipt of any subsequent examination authorization letter, [AUDITOR NAME] shall obtain written consent from the Holder to add such state to the list of participating states attached hereto at Exhibit A.
2. Confidential Information, defined. During the course of the Examination, [AUDITOR NAME] may have access to, or receive, confidential and/or proprietary information concerning the Holder including, but not limited to, materials relating to the administration of the Holder's business, operations, unclaimed property procedures and practices; financial information and/or accounting records; information regarding the Holder's current and former shareholders, members or partners, principals, directors, officers, employees, retirees, beneficiaries, customers, consumers, vendors, contractors, agents and other such representatives; and/or any other materials or information disclosed by the Holder or its principals, partners, directors, officers, employees, agents, consultants, advisors, legal counsel, accountants, and other such representatives (collectively "Representatives") to [INSERT AUDITOR NAME] and its Representatives in connection with the Examination. The Parties agree that all such information, including any materials derived therefrom, whether disclosed orally or in written (including electronic) form or otherwise, shall be considered proprietary and confidential and shall hereinafter be referred to as "Confidential Information". Confidential Information shall also include any report filing, voluntary self-disclosure agreement, or settlement agreement resulting from the Holder's reporting of any unclaimed property as well as any settlement, payment(s), or other interim or final resolution of the Examination. Confidential Information shall not include information or materials that are: (i) in the public domain not as a result of the violation of the undertakings herein; (ii) available to [AUDITOR NAME] on a non-confidential basis prior to the Holder's disclosure of it to [AUDITOR NAME], or (iii) hereafter made available to [AUDITOR NAME] on a non-confidential basis from a source other than the Holder, provided that such source in so acting is not violating any duty or agreement of confidentiality.
3. Non-Disclosure. [AUDITOR NAME], in receiving Confidential Information from the Holder or its Representatives, shall not disclose Confidential Information to any third-party (other than to representatives of other participating states to the extent provided below. [AUDITOR NAME] shall preserve the confidentiality of such Confidential Information and shall:
4. Solicitation. [AUDITOR NAME] shall not inform other states or jurisdictions that Delaware has authorized an examination of the Holder to solicit such states or jurisdictions to investigate, undertake, initiate or conduct any unclaimed property examination of the Holder. This restriction shall not, however, be construed to prohibit the Auditor from disclosing Delaware's involvement in the Examination to another Participating State once that state has issued a formal notice of examination to the Holder.
5. Records Retention. [AUDITOR NAME] shall retain the audit work papers (which may include the Confidential Information) in a secure environment for no longer than the period of time specified under the laws, rules or regulations of the Participating State(s) or [AUDITOR NAME]'s contract with the Participating State(s), whichever is longer, at which time the records (inclusive of any Confidential Information) shall be destroyed; and [AUDITOR NAME] shall certify in writing as to such destruction to the Holder using the following contact information:
6. Compelled Disclosure. If [AUDITOR NAME] shall be under a legal obligation, including but not limited to a subpoena or request by a court or any government entity or required in response to any applicable "freedom of information" request to disclose any Confidential Information to a third party, [AUDITOR NAME] shall give the Holder prompt notice thereof so that the Holder may timely object to the disclosure of such Confidential Information, seek a protective order, or waive [AUDITOR NAME]'s duty of non-disclosure. [AUDITOR NAME] shall reasonably cooperate with the Holder to the extent that it seeks a protective order or to otherwise object to the requested disclosure of the Confidential Information. Furthermore to the extent that the Holder seeks a protective order or objects to the requested disclosure and [AUDITOR NAME] is subsequently required to disclose by court order or governmental mandate any Confidential Information, or in the event Holder fails to act within a reasonable time period after receipt of [AUDITOR NAME]'s notice and/or affirmatively waives [AUDITOR NAME]'s duty of non-disclosure, and [AUDITOR NAME] is legally required to disclose any Confidential Information pursuant to this Section 6, [AUDITOR NAME] shall do so without liability under this Agreement.
7. Compliance With Applicable Laws. [AUDITOR NAME] represents and warrants that it has technical and organizational measures in place that (i) comply with all Applicable Laws; and (ii) meet or exceed the ISO/IECC 27002 information security controls standard to ensure the security and confidentiality of the Confidential Information in order to prevent, among other things: (a) accidental, unauthorized or unlawful destruction, alteration, modification or loss of the Confidential Information; and (b) accidental, unauthorized or unlawful disclosure or access to the Confidential Information. [AUDITOR NAME] warrants and represents that it shall maintain its security measures in accordance with: (i) the Applicable Laws; and (ii) the standards expressly represented in the INFORMATION SYSTEMS CERTIFICATION which is attached hereto and incorporated herein by reference at Exhibit B. For purposes of this Agreement, the term "Applicable Laws" shall mean all applicable state and federal laws, rules, and regulations governing the protection of Confidential Information (inclusive of Personally Identifiable Information) including, without limitation, 12 Del. Code Ann. §1189 and Del. Code Ann. tit. 6 §§ 12B-101 et. seq., as such laws, rules and regulations may be amended from time to time. In the event [AUDITOR NAME] is required to notify the Holder under any Applicable Law concerning any unauthorized access to, destruction, modification, disclosure or use of any Information (hereinafter a "Security Incident"), [AUDITOR NAME] shall: (a) provide such written notice promptly and without undue delay in accordance with the applicable legal authority; (b) take all remedial action required under Applicable Law to investigate and remediate any loss of the Information; (c) reasonably cooperate with Holder in promptly responding to all third party inquiries (if any) regarding the Security Incident; and (d) refrain from issuing any press release, providing any breach notification to individuals, or making any other public announcement concerning the Security Incident without the prior written approval of Holder (which approval shall not be unreasonably withheld, conditioned or delayed); provided, however, no written approval from Holder shall be necessary where [AUDITOR NAME] is required to act at the direction of law enforcement and/or other governmental personnel and such written approval is unreasonable under the circumstances and/or would result in [AUDITOR NAME]'s non-compliance with the directive.
8. Remedies. [AUDITOR NAME] hereby agrees that it shall promptly, and without undue delay notify Holder in writing of any unauthorized use or disclosure of the Confidential Information and reasonably cooperate with Holder to mitigate the effect of such unauthorized use or disclosure. [AUDITOR NAME] acknowledges that Holder would suffer irreparable harm if its Confidential Information were disclosed or used in violation of this Agreement, and that monetary damages would be an insufficient remedy for such unauthorized disclosure or use by [AUDITOR NAME] or its representatives. Accordingly, in addition to whatever right the Holder may have to obtain an award of damages or other relief upon [AUDITOR NAME]'s breach of this Agreement, the Holder may obtain an injunction or other equitable relief to protect its Confidential Information disclosed or used in violation of this Agreement.
9. Application of Agreement. This Agreement shall apply solely to the Examination and shall not be construed to permit the disclosure of any Confidential Information to any other state or jurisdiction not listed on Exhibit A on the date hereof, absent the express written consent of the Holder. This Agreement may not be canceled or modified, nor any of its provisions be waived, except in writing signed by the Parties hereto or, in the case of a waiver, on behalf of the Party making the waiver. This Agreement constitutes the entire agreement and understanding of the Parties hereto and supersedes any and all prior agreements and understandings relating to the subject matter hereof. If it is found in a final judgment by a court of competent jurisdiction that any term or provision hereof is invalid or unenforceable: (i) the remaining terms and provisions hereof shall be unimpaired and shall remain in full force and effect; (ii) the invalid or unenforceable provision or term shall be stricken from this Agreement and the validity, binding effect and enforceability of the remaining provisions of this Agreement shall not be affected or impaired in any manner.
2.15 Opening Conference
2.15.5 Pursuant to 12 Del.C. §1185, in certain circumstances, interest and penalties may be abated for good cause at the discretion of the State Escheator. In determining good cause in this context, the State Escheator may consider, if applicable and without limitation, the following factors: whether the Holder has a significant history of filing unclaimed property reports; the responsiveness of a Holder during the examination; and whether the Holder used ordinary business care in its compliance efforts.
2.16 Scope of Examination
2.17 Examination
2.18 Estimation
2.19 Projection
2.20 Complete and Researchable Records
2.21 Reportable Property Types
Commonly reported types of Unclaimed Property along with the National Association of Unclaimed Property Administrators ("NAUPA") Property Type Codes with Applicable Dormancy Periods are as follows:
2.22 Remediation
Dear <Owner>,
receiving a subsequent payment on , or
2.23 Bankruptcy
2.24 Statement of Findings and Request for Payment
2.25 Expedited Examinations
As provided in 12 Del.C. §1172(c), certain Holders may have the option of expediting the completion of a pending examination. The State shall publish a form "Intent to Expedite Completion of Examination" which shall outline the expectations of the Holder in that circumstance.
Last Updated: December 31 1969 19:00:00.
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