FinCEN Red Flags for Insurance Companies

Customer uses a synthetic identity combining a real SSN with fabricated personal details to purchase a high-value whole life or universal life policy with minimal health underwriting.

Policyholder pays the first premium with a large wire from a third party who is not a documented family member or employer, and the wire memo provides no explanation for the payment.

Customer purchases a single-premium life insurance policy with a large wire transfer and requests surrender or policy loan within the free-look period, effectively using the policy as a money laundering vehicle.

Corporate-owned life insurance (COLI) policy is purchased with company funds but the insured employees are low-level workers with no executive role, and the death benefit is disproportionate to their compensation.

Policyholder wires premiums from an account in a jurisdiction subject to OFAC sanctions, routed through an intermediary bank, and requests the policy benefits be paid to a beneficiary in the same sanctioned country.

Multiple individuals listed as beneficiaries on separate life insurance policies all share the same address and phone number, with the policies purchased by a single agent associated with a massage parlor or escort service.

Foreign national uses a U.S. life insurance policy as a store of value, funding it with wires from a sanctioned jurisdiction and planning to surrender it later to receive clean U.S. dollars from the insurer.

PEP purchases a high-value life insurance policy with premiums paid via wire from a foreign government bank account, and the coverage amount far exceeds any documented legitimate salary or assets.

Policy applicant provides identification that appears altered or forged, with mismatched holograms, incorrect fonts, or a photo that does not resemble the person presenting the document.

Applicant for a life insurance policy uses a Social Security number that belongs to a deceased individual, or the number shows no credit history or prior tax filings.

Corporate policyholder is a shell company with no physical office, website, or employees, and the stated business purpose is inconsistent with the type or amount of insurance requested.

Customer pays premiums using sequentially numbered checks from multiple unrelated bank accounts, suggesting the policy is being funded by a network of nominees or shell accounts.