While you may have encountered some Life insurance agents that acted like they were applying a particular form of torture to you, I bet you didn’t know that life agents are on the front lines of the war on terror. It is true. We have been recruited to be the de facto eyes and ears of the government to interdict unsavory enemies of America that may try and harm us by purchasing life insurance.
My enlistment as an anti-terrorist crusader comes from the Anit-Money Laundering course, administered by the global consulting firm LIMRA, that all Life Insurance agents must take:
As a result of the terrorist attacks on September 11, 2001 (9/11), Congress enacted the “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism” Act. This act, commonly referred to as the USA PATRIOT Act, was signed into law by President George W. Bush on October 26, 2001.
Section 352 of the USA PATRIOT Act, in part, requires financial institutions to establish an anti-money laundering (AML) program.
“An insurance company is responsible for integrating its agents and brokers into its anti-money laundering program, for obtaining relevant customer-related information from them, and for using that information to assess the money laundering risks presented by its business and to identify any ’red flags’.” (Emphasis added)
Dirty money leads to dirty bombs
The problem is that terrorists or evil doers not only don’t think it’s against the law to blow up our buildings; they have no problem selling drugs to generate cash (think Afghanistan). Before they can make legitimate purchases of cars, trucks or airplanes to carry out their evil plans, they have to convert their ill-gotten gains into legitimate cash.
Crazy as it may sound; you can purchase a life insurance policy or annuity and then cancel it. When the insurance company sends you a check for the balance of your funds…Bingo! Clean money with a good paper trail.
I can’t play dumb
What life insurance agent would help a drug dealer or terrorist launder money? It’s not as if you actually know the nefarious intent of your client. Plus, when some agents are looking at a hefty pay day of several thousand dollars for pushing paper with a willing buyer, not many questions are asked. But turning a blind eye is being watched by the government.
Willful Blindness – A deliberate effort to avoid or ignore information that could lead to the discovery of unlawful activity. For example, an individual is considered to be willfully blind if he or she has suspicions regarding a client’s transaction activity or has reason to question the true identity of the beneficial owner of an account, but deliberately chooses not to follow up on those suspicions, preferring instead to remain ignorant of the true circumstances. Willful blindness is punishable under the law with a severity similar to that of an intentional violation.
The penalties associated with money laundering are severe.
- Fines may be twice the amount of the transaction up to $1 million.
- Property involved in the transaction may also be subject to seizure and forfeiture.
- Employees and producers of financial institutions can be fined individually and sentenced to up to 20 years of imprisonment for knowing or being willfully blind to the fact that the transaction involved illegal funds. You can protect yourself from charges of willful blindness by reporting any suspicious behavior to the carrier’s compliance officer and keeping documentation of your report.
- Reputational risk to you, your firm, and the company you represent.
I love the bullet point that your reputation may be harmed by aiding money laundering as if the agent or owner really cared in the first place.
Getting to know you
The solution to outwitting the terrorist and drug lords, as I am instructed, is to “Know Your Customer”. If you don’t like what your customer is telling you as a red blooded American you get to snitch with a Suspicious Activity Report (SAR).
You also will be able to respond when a company has identified red flags during its review of applications or during monitoring of ongoing transactions, and to provide client information that will help the company determine whether the red flags warrant filing a Suspicious Activity Report (SAR).
Why do you talk funny?
Because you never know when one of your clients may be politically connected with a foreign government:
A client in an elected or appointed government position (particularly in a foreign government) is considered higher risk due to possible corruption, misappropriation of funds, or bribery. These persons are known as PEPs or PEFPs, i.e., politically exposed persons or politically exposed foreign persons.
I should be so lucky as to have a foreign national with embassy protection call me for life insurance. That’s a red flag right there.
Creating your secret dossier
The nice aspect of all this terrorist, suspicious, money laundering government mandated training is that they request that I extract as much personal and financial information out of you as possible.
Information you collect and retain on a client should include items like the following:
- Details about the client’s business, occupation, or profession.
- The source of the client’s wealth (i.e., how the client obtained his or her wealth).
- The source of funds to be used as payment for a policy (e.g., salary income, investments income, or savings versus a one-time windfall such as inheritance or lottery winnings).
- The client’s current income and the source of his or her income.
- The client’s assets and net worth.
- The client’s involvement in governmental entities or activities, and whether he or she was elected or appointed, or volunteered.
- The client’s involvement in his or her community.
- How he or she came to be your client, your relationship to the client, and how long you have known the client.
However, I am a little bummed that the government is not letting me use water-boarding techniques to get the last little bit of financial data out of my clients and make them sign on the dotted line. Of course, sitting with a life insurance agent may be considered torture enough by some folks.
Recite the pledge of allegiance please
Finally, for those who adamantly subscribe to conspiracy theories, or just don’t trust the federal government in general, your unwillingness to answer ALL my questions maybe a BIG RED FLAG.
Red Flags during the Sales Process
- Client is evasive or unwilling to provide customary information or an identity document for verification.
- Information client provides is inconsistent with what you know about him or her or that can be corroborated through other sources.
- Client provides a post office box for address and does not have, or refuses to provide, a street address.
- Client wants life insurance coverage, or to invest funds in an annuity, for an amount that is inconsistent with the financial information you have obtained.
- Client is more interested in product liquidity than in its cost and performance.
- Client has questions about government reporting that will be required if he or she purchases.
- Client is from a distant place and wants to do business with you without a credible explanation.
- You suspect client is acting as a “front” for an undisclosed third party.
- Client was introduced by an agent or a referral source in an area known for a high level of financial crimes or drug trafficking.
Prove you love America…Call Me Today!!!
If you want to show your love of our great country, and prove you are not a drug dealing terrorist, you must call me and purchase life insurance from me. I will dutifully report to the keepers of liberty in our nation that you are a red blooded American willing to purchase a life insurance policy or annuity from me for the good of our country. It is a tough and dirty job, but someone has to keep the homeland safe. What higher caliber of troops than life insurance agents that trained the CIA in torture techniques.