Insurance 1 Transaction 3 100 000 cash Transaction

Insurance (1) Transaction 3: $100, 000 cash Transaction 2: $100, 000 cash Transaction 1: $50, 000 cash Mr X Insurer Policyholder Broker Policy premium transferred from broker to insurer Life insurance policy Purchase value £ 250, 000 Copyright Lessons Learned Ltd 2016 1

Insurance (2) Key facts § Vulnerable sector: historical issues with lack of training and inconsistent regulation § Inherent risks: prevalence of intermediaries and agents; named beneficiary often not the named policyholder § Basic techniques: cash purchase of policies; overpayment of premiums; early redemption; false claims on policies Money launderers’ perspective § Use of third party intermediaries/brokers to effect transactions § Funds deposited under cover of insurance companies § Products can be used both to launder and earn income § Relative ease with which products can be transferred between beneficiaries Copyright Lessons Learned Ltd 2016 2

Insurance (3) Possible ‘red flags’ § Pre-signed policy application forms § Purchase of products which do not make economic sense or do not fit the policyholder’s apparent business needs § Payment for products via unrelated third parties § Payment for products using large amounts of cash § Unusual overpayments of premiums followed by request to return overpaid amounts § Early redemption of policies which cannot be satisfactorily explained § Change of beneficiaries which cannot be satisfactorily explained § Unusual and frequent claims on policies, especially when payout is made to an unconnected third party Copyright Lessons Learned Ltd 2016 3