Insurance Company

Criminals exploit insurance companies by frequently changing policyholders or named beneficiaries. This constant reshuffling conceals the individual who ultimately benefits from claims or payouts, impeding financial institutions' ability to determine the policy's real owner.

Insurance companies issue bond-like insurance products that criminals misuse by:

• Offering insurance-based investment instruments where illicit funds are stored under an insurance wrapper.
• Allowing redemption and interest proceeds to appear as standard policy benefits, further complicating the detection of illicit origins.

Criminals form or exploit a self-owned insurance company (captive insurer) to:

• Inflate premiums or fabricate claims, creating complex layers of transactions that hinder AML scrutiny.
• Facilitate the final integration of illicit funds as seemingly legitimate insurance reimbursements.

Insurance companies are exploited for this technique by:

• Accepting premium payments, even if suspiciously structured or from unknown third parties, and processing early surrenders as standard disbursements.
• Generating payouts that appear as legitimate insurance refunds, enabling the layering and integration of criminal proceeds.
• Overlooking inconsistencies in policy ownership or payment sources, which adds to the difficulty of identifying money-laundering indicators.

Insurance companies issue annuity contracts, which criminals exploit by depositing illicit funds as premiums. They may be unaware of suspicious overfunding or the use of third parties with no clear relationship to the policyholder. Repeated early surrenders and ownership transfers can appear as routine transactions, complicating financial institutions' detection of illicit origins.

Insurance companies issue and administer policies that criminals exploit by repeatedly substituting beneficiaries or policyholders. They:

• Provide high-value or single-premium insurance products that can be rapidly funded and redeemed to layer illicit proceeds.
• Face compliance challenges when policy details change frequently without credible justification, impeding effective AML monitoring.

Insurance companies are used as conduits for overfunding schemes. Criminals:

• Purchase or maintain policies that permit large or repeated contributions.
• Disguise surpluses or refunds as legitimate payouts or early surrenders.

These transactions often appear routine, impeding financial institutions' ability to identify illicit origins, especially when policy terms naturally allow flexible premium and withdrawal options.

Criminals exploit or create insurance companies, including fraudulent offshore entities, by:

• Inflating premiums, faking or overstating claims, and channeling illicit funds as routine policy transactions.
• Using complex or layered cross-border reinsurance deals that obscure beneficial ownership and payment trails.

Ultimately, payouts from these manipulated policies blend illicit capital with legitimate insurance proceeds, hindering financial institutions' efforts to detect the underlying criminal source.

Offshore insurance companies are formed or acquired by illicit actors to facilitate money laundering by:

• Issuing policies in jurisdictions with minimal transparency, making it difficult to trace premium sources.
• Accepting large premium payments that intermix legitimate and illicit funds, enabling layering.
• Paying out claims or surrender values that appear lawful, masking the criminal origin of assets.

Weak regulatory oversight in these locales hinders financial institutions’ ability to identify ultimate beneficiaries or verify the legitimacy of transactions.

Insurance companies are compelled to cover ransom payments for hijacked vessels or crews, inadvertently becoming part of piracy-related transactions. Criminals swiftly move these payouts through unregulated channels, complicating financial institutions' ability to track or identify suspicious activity.