Transamerica's Guidelines to Third Party Checks & Monetary Instruments
05-12-2008
As you’re aware, federal and state rules and regulations require life insurance companies, mutual funds and other providers of financial products to closely scrutinize the sale of their products. Much of this focus has been on unethical sales practices, inappropriate accounting methods and fraudulent trading practices in the mutual fund industry. We are required to ensure that our insurance products are not purchased with money obtained from illegal activities or terrorist-sponsoring organizations for the purpose of money laundering.
As always, the Company continues to look for suspicious activities, including third-party checks/monetary instruments sent with applications. To that end, we want to remind you of the Company’s updated policies regarding the acceptance of third-party checks and other third-party monetary instruments that are submitted as premiums for life insurance policies.
Note: For purposes of this Bulletin, the following definitions apply.
• A third-party check/monetary instrument refers to a check/monetary instrument that is endorsed by the payee and passed to a subsequent holder who endorses the check/monetary instrument prior to cashing it.
• An “apparent relationship to the policy” refers to a payor with an established relationship or causal connection to the policy owner or the policy itself.
Please note the following guidelines and examples regarding third-party checks/monetary instruments for life insurance.
1) The Company rarely accepts third-party checks/monetary instruments for life insurance. An example of a situation in which a third-party check/monetary instrument may, after review, be accepted would be when the third-party check/monetary instrument is endorsed by a payee from a reputable financial institution.
2) The Company rarely accepts checks/monetary instruments for life insurance written by a payor without an apparent relationship to the policy. Checks/monetary instruments received by the insurer from a payor without an apparent relationship to the policy will be reviewed on a case-bycase basis to determine if the payor has an acceptable relationship to the policy or to the policy owner. If it is determined that the payor does not have an acceptable relationship to either the policy or the policy owner, the payment will be returned to the policy owner (payor), accompanied by an explanatory letter within 24 hours of receipt of payment.
Following are examples of situations where checks/monetary instruments written by a payor without an apparent relationship to the policy may, after review, be accepted.
• Checks/monetary instruments received by an individual not named as the policy owner for a policy set up as a Trust or Entity. (Note: if the policy owner is an irrevocable trust, the Verification of Irrevocable Trust Agreement form must be submitted at the time of application. Otherwise, the funds will be returned within 24 hours of receipt.) A copy of the trust agreement is not required when a trustee applies for insurance; however, the Underwriting department may request a copy of the trust agreement if it is the only way an insurable interest can be established.
• A family member who submits premium payments on behalf of the policy or policy owner.
Verification of Irrevocable Trust Agreement Form
When a policy owner is an irrevocable trust, please submit a completed Verification of Irrevocable Trust Agreement form at time of application. This form is located at www.buaweb.com.
This news item is a reminded that producers do not submit applications with unacceptable third-party checks or checks written by payors who do not have an acceptable relationship to the policy or to the policy owner.
If you have any questions, please contact Beth Radefeld, or your Sale Consultant @ 800-792-6795.
