Single-Premium Policy Laundering
Laundering through life and investment insurance products. Illicit funds are placed via large single-premium policies or overpayments, then withdrawn as clean funds through early surrender, partial withdrawals, or refunds of overpaid premiums, often shortly after inception and at the cost of surrender penalties.
What it is
Laundering through life and investment insurance products. Illicit funds are placed via large single-premium policies or overpayments, then withdrawn as clean funds through early surrender, partial withdrawals, or refunds of overpaid premiums, often shortly after inception and at the cost of surrender penalties.
Control objective
Detect the use of single-premium and investment-linked insurance policies to place and extract illicit funds, including early surrender, premium overpayment and refund, and changes of beneficiary or assignee inconsistent with legitimate planning.
Data required
- Premium type (single, regular) and amount relative to customer profile
- Policy inception, surrender, and withdrawal timing
- Source of funds for the premium payment
- Overpayment and refund amounts and destination accounts
- Beneficiary and assignment changes after inception
- Surrender penalties accepted relative to recovered value
- Funding and refund payment methods and jurisdictions
- Customer declared investment objective and risk profile
Related typologies (Money Laundering)
Rapid Movement of Funds
Funds received and immediately transferred onward with minimal dwell time, suggesting the account is being used as a pass-through to layer illicit proceeds and obscure audit trails.
Structuring / Threshold Avoidance
Deliberate splitting of transactions to remain below reporting thresholds or monitoring triggers. Commonly associated with layering proceeds of crime or avoiding CTR filings.
Behavioural Change Indicators
Sudden or unexplained changes in a customer's transaction behaviour relative to their established profile, such as new geographies, increased volumes, or different payment types, potentially indicating account takeover or use for laundering.
Mule Account Activity
Accounts used to receive and rapidly disburse funds on behalf of criminal networks. Mule accounts are often opened by individuals who are recruited, coerced, or deceived into facilitating the movement of illicit proceeds.
Shell Company Indicators
Use of corporate entities with no genuine commercial activity to obscure beneficial ownership, layer funds, or create false invoicing chains. Shell companies are commonly used in trade-based money laundering and corruption schemes.