Question

Daryl, a life insurance producer, noticed that the applicant for a high premium universal life insurance policy became very tense when completing the customer identification portion of the application. Also, the drivers license did not match the address written on the application, which the applicant explained was due to a recent move. Observing his company’s AML program, which is modeled after FinCEN rules, Daryl should first do what?

Answer 1

Daryl should file a Suspicious Activity Report (SAR) as the first step of action when noticing tensions and inconsistencies during an application process, in line with the company's AML program and FinCEN rules.

Step-by-step explanation:

When Daryl, a life insurance producer, observes an applicant displaying tension during the customer identification process and providing inconsistent information, such as mismatching addresses on the driver's license and the application, he should adhere to the company's anti-money laundering (AML) program modeled after Financial Crimes Enforcement Network (FinCEN) rules.

The first step Daryl should take is to file a Suspicious Activity Report (SAR). Filing an SAR is essential when potential signs of fraudulent activities or inconsistencies are noted, as it is a mechanism to report suspected fraud and money laundering to the appropriate authorities. It is important for Daryl to document his observations and the reasons for suspicion to ensure compliance with the AML policies and insurance regulations.

The AML program is designed to prevent, detect, and report potentially illicit activities that could be associated with financial transactions, including life insurance policies.