Which of the below would be relevant money laundering red flags for life insurance companies? (Select Two.)

Question

Options

• APaying premium several years in advance and terminating early for a refund
• BNatural persons having more than one insurance policy
• CHigh-premium life insurances that provide high payouts
• DRegularly switching policies and accepting penalties
• EBeneficiary payouts to elderly people

• A
  77% (10)
• B
  15% (2)
• E
  8% (1)

Explanation

Paying premium several years in advance and terminating early for a refund (A):"A typical red flag is when a policyholder pays large premiums up front and then seeks early termination to receive a refund. This can be used to launder illicit funds by integrating them into the financial system and then retrieving `clean' money."(CAMS 6th Edition, Life Insurance ML/TF Risks; FATF Guidance for a Risk-Based Approach for the Life Insurance Sector) Regularly switching policies and accepting penalties (D):"Frequent changes in insurance policies or products, even at a financial loss, are considered suspicious. This may indicate an attempt to obscure the money trail or integrate illicit proceeds."(CAMS 6th Edition, ML/TF Red Flags in Life

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