The uncollected sums from life assurance alone mount up to pounds 1bn, something that caused not only soul-searching but costly physical searches that mostly come to a dead end. But one man's initiative has produced a radical solution that should satisfy all parties.
The Unclaimed Assets Register in London aims to help the public trace lost policies, and soon, other assets. The flat fee of pounds 15 per search compares with at least pounds 15bn at stake. But it should also help insurers, bankers and solicitors while relieving the Treasury of what could have been an embarrassing confrontation with the City over the missing billions.
Even the Government has missing persons on its financial files, ranging from elderly people entitled to postwar credits to those in all age groups who have never collected prizes from Premium Bonds.
Yet the Unclaimed Assets Register is not an official organisation, although the Financial Services Authority (which now runs the ombudsman system) has made encouraging noises. It was set up by Aon Risk Services which belongs to the world's second-largest insurance broker.
Being based in Chicago, it learnt a lesson from the US law of escheat whereby a current total of $300bn must go into various states' coffers if not claimed within seven years. Other countries with the same problem are watching the embryonic Unclaimed Assets Register (UAR), first of its kind.
It is the brainchild of 52-year-old Keith Hollender, a British executive who sold tractors in Iran before joining Bank of America in the Eighties. Having dealt with unclaimed dividends there, he realised at Aon that missing policy-holders loomed even larger.
He told The Independent: "This is a big problem and we knew the City was alive to the fact that Whitehall was becoming concerned. What highlighted it was the Holocaust case in New York where Swiss banks were sued by the descendants of murdered Jews.
"People then realised that, even under conditions of normality in Britain, there was more than pounds 15bn waiting to find a home or an heir. The main reason for unclaimed moneys is that individuals have failed to advise companies of a new address and the documentation has been lost too. Some people may have forgotten to tell partners or next-of-kin of an investment."
When the scheme starts officially early next month, it is expected the register will include more than 100,000 names from a dozen insurance companies. While 15 are still waiting for final clearance by their lawyers, eight have signed up so far. They include Scottish Life and Friends Provident as well as Abbey Life and the AXA group that includes Equity & Law and Sun Life & Provincial.
The UAR's biggest coup so far is to get the Prudential to release (for a trial period of two years) 600,000 names who are entitled to pounds 37m. Also going on the register is Standard Life which is holding pounds 20m for 50,000 former policyholders. The UAR has been doing informal traces on life policies and occupational pensions, but the official launch has been delayed by two problems. The first one was the expensive investment in encrypted software to cope with a database that should expand to at least 500,000 names by the end of 2000.
The other was to protect privacy and guard against fraud, something that worries insurers such as Norwich Union which still keeps 78,000 uncollected windfalls from its flotation. Mr Hollender says, "We have discussed this with the financial regulators and trade associations besides taking advice from our lawyers, Cameron McKenna. We will work according to both the letter and spirit of the Data Protection laws of 1984 and 1988."
So the assets register will not be online or connected with the Internet. The only way in is through a posted search form on which likely claimants, original owners or their heirs, must provide satisfactory details. Proof of identity and address (a utility bill?) must be attached.
Mr Hollender expects the majority of requests from executors and solicitors - and he wants the UAR to become a required step during probate. He also says that tracings could generate an income of pounds 3m to pounds 4m a year for charities, among which Age Concern and three others have already signed letters of intent.
"The idea is that if a charity can help to trace missing moneys, it might be rewarded with a portion of the funds as a gift."
The UAR expects to rely more on financial intermediaries who are ideally placed. If someone comes in with a lump-sum or needing some other advice, the intermediary should automatically ask whether there are any forgotten funds that might be available.
Mr Hollender says: "We are going to provide a service for all the public at a very low charge. If there are moneys due, we would expect to trace the asset within 28 days, but in any case we will repeat the search at no extra cost a year on. Our target is to have a million entries by next November."
Eventually, UAR expects to list not only life and personal pensions policies but also moneys due from occupational schemes and a range of savings vehicles. These will include dormant accounts at bank and building societies, shares certificates and dividends.
Apparently, two per cent of the names on lists of shareholders are deceased, so the registrars are keen to clean up their lists to save costs. National Savings may also outsource their efforts to trace people who have not claimed pounds 2.8bn which some reckon is only one-tenth of what has never been claimed from all public and private institutions.
Unclaimed Assets Register, Lloyds Chambers, London E1 8DFReuse content