Life policies – case study 7

A policyholder living abroad bought a life insurance policy and, soon afterwards, requested early surrender of the policy. This early surrender resulted in high costs for the policyholder. Afterwards, the policyholder made a request by fax to transfer the money to an account of another person living abroad. The insurer contacted the FIU, which, in light of the urgency of the situation, requested that the transaction should be postponed for 24 hours. This gave the FIU time to collect data, which indicated that the policyholder had been convicted for illegal public attraction of savings. The case has been transferred to the justice department for further investigation.

Life policies – case study 8

Two life insurance policies were bought for a large amount in the names of Mr X and Mr Y. The payments were made by cheque, originating from the account of a European investment company. Both polices were used as security for a mortgage loan with a company that specialised in leasing. As the beneficiaries were not the policyholders and in light of the unusual financing being provided by a leasing company, the insurer contacted the investment company in order to understand the origin of the money that had been deposited in the account. It appeared that the money was deposited with the company in cash by random clients. Following the disclosure of suspicion by the insurance company it became evident that Mr X and Mr Y were known by the customs authorities for the illegal importation and exportation of cars.

Life policies – case study 9

A 34 year old car dealer received a loan through a broker of a life insurance company to purchase a house. He invested around 25% of the loan in a single-premium life insurance policy. He later surrendered the policy early to pay back the loan (capital and interest), making up the shortfall through other funds. The use of a substantial proportion of the loan to purchase a policy combined with the unexpectedly early repayment of the loan led to the FIU being contacted. The FIU’s investigation revealed that the policyholder was known for stealing and receiving stolen cars. Moreover, he had used false documents to prove the sources of his income and wealth.

Life policies – case study 10

A life insurance company was contacted by a financial adviser calling on behalf of a customer who had taken out a policy. The customer had recently been convicted of fraud and wished to ascertain whether such a conviction would compromise the policy’s terms and conditions. The conviction did not pose a problem for the continuation of the policy. However the disclosure of fraud prompted an internal review. Active investment policies were identified and a media article was found, which stated that the customer had been part of a gang involved in a €6 million tax fraud and subsequent money laundering offences. A suspicious activity report was submitted to the FIU. Following dissemination of the intelligence by the FIU, the tax authority advised the insurance company that its report provided useful information, allowing a case for confiscation of assets to be made.

Life policies – case study 11

A life insurance company in Country A, which had sold a substantial investment policy to Mr J, was approached by the police force. Mr J was being investigated as he was part of a criminal gang trafficking heroin from Country F by using sophisticated processes to assimilate heroin into cardboard boxes, which were subsequently used to ship legitimate cargo overseas. Once the contents of the boxes had been delivered, the empty boxes were taken to a processing plant in a window manufacturing business, where the heroin was removed, processed, and sold. Mr J had purchased the policy by means of a very large transfer from his bank account citing the source of funds in the account as the product of savings and income. After a review, it was found that the relationship with the insurer had been structured so that it contained cross-border elements which facilitated money laundering, including the fact that the investment was an overseas product promoted by the company.

Life policies – case study 12

A life insurance company received a payment of €25,000 for an existing customer via an ‘over the counter’ transaction. When the money was received, enquiries were made by the company as to where the money had come from. It transpired that the money had been deposited in cash at a bank in order to pay premiums to the insurance company. The receiving bank had not asked questions when the cash was received. However, the life insurance company considered the transaction to be suspicious in light of the amount, the fact that it had not received such a payment from the customer before and that it contradicted confirmations provided by the customer as to how payments would be made, and the absence of reasonable responses by the customer to questions by the insurance company. Consequently, a suspicious activity report was made to the FIU.

Copies of the paper are available. http://www.iaisweb.org/view/element_href.cfm?src=1/20141.pdf