LIFE NEW BUSINESS PROCEDURES. Initial Premium Processing

Transcription

1 LIFE NEW BUSINESS PROCEDURES Initial Premium Processing

2 TABLE OF CONTENTS BACKGROUND.. 3 CHECK REVIEW BY FIELD OFFICE...3 ACCEPTABLE FORMS OF PAYMENT... 3 Wiring Money to Pay the Initial Premium Cashier s Check... 4 Starter Check... 4 UNACCEPTABLE FORMS OF PAYMENT 4 Producer Check 5 Money Order 5 Traveler s Check.. 6 Checks Drawn to Cash. 6 Cash.. 6 Third Party Check. 6

3 BACKGROUND Know your customer ( KYC ) is the due diligence regulation that financial institutions and other applicable companies must perform to identify their clients, by obtaining pertinent information, prior to doing financial business with them. KYC policies are critical in the prevention and detection of identity theft fraud, money laundering, and terrorist financing. As a result of such regulatory changes and efforts by companies to adhere to such requirements, check processing procedures have been enhanced to clarify acceptable and unacceptable forms of payment. Note that these procedures cover the most common forms of payment and any other types should be discussed with your supervisor or compliance partner. CHECK REVIEW BY FIELD OFFICE Checks submitted to the field office are to be verified using the following guidelines prior to submitting to the home office. The field office will have the opportunity to work directly with the producer, which will avoid checks being returned to the person or entity listed on the check, as well as delays in applying the premium until the additional documentation is provided. ACCEPTABLE FORMS OF PAYMENT Checks submitted to pay the initial premium on a life new business policy must be made payable to Penn Mutual or Penn Insurance & Annuity, if applicable, completed, dated, and signed by the Policy Owner or an Authorized Payor. An Authorized Payor includes the insured or another related party disclosed in the application. Payor information is reviewed and approved by Penn Mutual for appropriateness. Wiring Money to Pay the Initial Premium The information below should be used when wiring money: Company Name Penn Mutual Life Penn Insurance & Annuity Bank PNC Bank, Philadelphia PA PNC Bank, Philadelphia PA ABA# Account Attn: New Business Policy Number New Business Policy Number

4 Cashier s Check A Cashier s Check may be accepted if one or more of the following conditions are met. 1. When the bank prepares the check the face of the check should include the account holder s name and the source of the funds such as William Penn s savings account # This information needs to be typed on the check by the bank; it cannot be written on the check. The account holder must be the person or entity listed as the Owner or Payor on Penn Mutual s administrative records. 2. Provide a letter on bank letterhead stating the source of the funds. The letter needs to include the name of the account holder and the account number. The account holder must be the same person or entity listed as the Owner or Payor on Penn Mutual s administrative records. 3. Provide a copy of a bank statement that lists the funds being deducted from the account to fund the bank or cashier check. The bank statement must include the name of the account holder and the account number. The account holder must be the same person or entity listed as the Owner or Payor on Penn Mutual s administrative records. If one of the above conditions is not met, the check will not be accepted and it will be returned to the Starter Check A Starter Check may be accepted if one or more of the following conditions are met. 1. Provide a letter on bank letterhead stating the source of the funds. The letter needs to include the name of the account holder and the account number with a bank contact for verification. The account holder must be the same person or entity listed as the Owner or Payor on Penn Mutual s administrative records. 2. Provide a copy of a bank statement that lists the funds being deducted from the account to fund the bank or cashier check. The bank statement must include the name of the account holder and the account number. The account holder must be the same person or entity listed as the Owner or Payor on Penn Mutual s administrative records. If one of the above conditions is not met, the check will not be accepted and it will be returned to the

5 Check on behalf of a Trust A Check from the insured on behalf of a Trust may be accepted if one or more of the following conditions are met. 1. The insured makes the check payable to the Trust and the Trustee then endorses the check to Penn Mutual (or Penn Insurance & Annuity if applicable). 2. A letter is submitted with the insured s check signed by the Trustee stating he or she acknowledges the tax implications if any of the policy being funded by the insured. In this case the policy payor would be changed to the insured on Penn Mutual s administrative records. If one of the above conditions is not met, the check will not be accepted and it will be returned to the UNACCEPTABLE FORMS OF PAYMENT All other types of payments are deemed unacceptable. The most common forms of payment are below: Producer Check Money Order Traveler s check Checks drawn to cash Cash Third Party Check Cashier s Check without required documentation Starter Check without required documentation Any other types of payments should be directed to your supervisor for review and/or your Compliance partner. Producer Check A producer check is a personal check by the producer to pay the initial premium. This is not an acceptable form of payment. Money Order A money order is a payment order for a specified amount of money. Because it is required that the funds be prepaid for the amount, it is often a more trusted method of payment than a personal check. However, this is not an acceptable form of payment.

6 Traveler s Check A traveler's check is a preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege. This is not an acceptable form of payment. Checks Drawn to Cash A check drawn to cash is a personal check written to cash but endorsed to another party, This is not an acceptable form of payment. Cash Cash is not an acceptable form of payment. Third Party Check A third party check is a payment in check form from any person or entity not disclosed in the application file as the Owner or Payor. This type of check will not be accepted and it will be returned to the If the intent is to change the Owner or Payor of record to the person/entity listed on the check, a letter providing change instructions must be submitted with the check. The letter should contain the following: - The payor change request and the address and tax ID number for the new payor. - The payor relationship, if the payor relationship is unusual or unclear the letter should also include an explanation as to why this person/ entity is requested to be the payor. - Note that a reasonable relationship must exist and the underwriter must approve the payor change. If the payor change is not approved, the check will not be accepted and it will be returned to the