Reporting Suspicious and Unusual Transactions

The following examples of suspicious and unusual transactions have been taken from the IAIS – Insurance Fraud Subcommittee Anti-Money Laundering Guidance Notes:

• Application for a policy from a potential customer in a distant place where comparable policy could be provided ‘closer to home’.
• Application for business outside the policyholder’s normal pattern of business.
• Introduction by an agent/intermediary in an unregulated or loosely regulated jurisdiction or where organised criminal activities (e.g. drug trafficking or terrorist activity) are prevalent.
• Any want of information or delay in the provision of information to enable verification to be completed.
• Any transaction involving an undisclosed party.
• Early termination of a product, especially at a loss caused by front-end loading, or where cash was tendered and/or the refund cheque is to a third party.
• A transfer of the benefit of a product to an apparently unrelated third party.
• Requests for a large purchase of a lump sum contract where the policyholder’s experience is small, regular payments contracts.
• Attempts to use a third party cheque to make a proposed purchase of a policy.
• Applicant for insurance business shows no concern for the performance of the policy but much concern for the early cancellation of the contract.
• Applicant for insurance business attempts to use cash to complete a proposed transaction when this type of business transaction would normally be handled by cheques or other payment instruments.
• Applicant for insurance business requests to make a lump sum payment by a wire transfer or with foreign currency.
• Applicant for insurance business is reluctant to provide normal information when applying for a policy, providing minimal or fictitious information or, provides information that is difficult or expensive for the institution to verify.
• Applicant for insurance business appears to have policies with several institutions.
• Applicant for insurance business purchases policies in amounts considered beyond the customer’s apparent means.
• Applicant for insurance business establishes a large insurance policy and within a short time period cancels the policy, requests the cash value returned, payable to a third party.
• Applicant for insurance business wants to borrow the maximum cash value of a single premium policy, soon after paying for the policy.
• Applicant for insurance business uses a mailing address outside the insurance supervisor’s jurisdiction and where the home telephone has been disconnected, upon verification attempt.
• New business or existing business transactions, where the proper identification of client/s cannot be established or information related to the identification and verification process is suspicious
• Where a Metropolitan staff member dealing with a transaction actually knows, or believes that there is a reasonable possibility that the client’s/clients’ name/s is/are false. (NB: In this instance, employees should not process the transaction but immediately refer it to the MLCO.);
• Where a policyholder has a single policy or a variety of policies but Metropolitan receives premiums from more than three different bank accounts during the existence of the policy;