• Components of Unum's anti-money laundering program
• Assessment of high risk products
• Know your customer guidelines
• Sources of funds
• Suspicious activity reports (SAR's)
• Identifying a suspicious transaction — suspicious activity reports (SAR's)
• Red flags
• Unum's 314(a) responses
• Financial crimes enforcement network (FinCEN) 314 (a) requests

• Designation of a Anti-Money Laundering Compliance Officer responsible for coordinating and monitoring day-to-day compliance
• Assessment of products covered by the insurance regulations, as well as an assessment of risk inherent in our other insurance products
• A "Know Your Customer" program that provides for identification of clients at application
• Acceptance of funds only when source can be identified (i.e., no cash or cash equivalent)
• Procedures to identify and report suspicious transactions to government authorities (Special Investigation Unit, SIU, will be responsible for compliance)
• Employee training to relevant functions to increase money laundering awareness
• Internal audit of AML Policies and Procedures
• Identify Money Laundering "Red Flags"

• Any product which allows a customer to readily convert cash to a monetary instrument
• Any product or service which allows a customer to readily move value from one jurisdiction to another and which conceals the source of those funds

For each covered product, Unum has "Know Your Customer" guidelines which are designed to:

• Determine and document the true identity of customers, including basic background information;
• Obtain and document any additional customer information, commensurate with the assessment of the money laundering risks posed by the customer's expected use of products and services; and
• Protect Unum from the risks associated with doing business with individuals whose identities cannot be determined.

With limited exception, deposits and premium payments will be accepted only in the form of a personal check or wire transfer from the contract owner, policy owner, account owner or Third Party Administrator.

• In the case of wire orders, we should verify the source of funds prior to accepting any such wire order.
• Unum will not accept third party checks.
• No special name accounts (i.e., an account using a pseudonym or number rather than the actual name of the customer) will be permitted unless the Anti-Money Laundering Compliance Officer determines that the customer has a legitimate reason for having such an account.
• Unum will not accept money orders or travelers checks. The preferred method of payment is the purchaser's personal check, however a bank cashier's or treasurer's check is an acceptable alternative. The Anti-Money Laundering Compliance Officer must approve any other form of payment prior to its submission.

Unum must send a Suspicious Activity Report (SAR) to the Department of Treasury's Financial Crimes Enforcement Network ("FinCEN") when Unum knows, suspects, or has reason to suspect that any transaction conducted or attempted by, at, or through Unum.

• Involves funds derived from illegal activities or is intended or conducted in order to hide or disguise funds or assets derived from illegal activities (including, without limitation, the ownership, source, location, or control of such funds or assets) as part of a plan to violate or evade any law or regulation or to avoid any transaction reporting requirement under federal law;
• Is designed to evade U.S. anti-money laundering regulations; or
• Has no business or apparent lawful purpose or is not the type of transaction in which the particular customer would normally be expected to engage and Unum knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.
• Special Investigative Unit, SIU, will handle submission of SAR's.

Since the types of transactions which may be used by a money launderer are almost unlimited, it is difficult to define a suspicious transaction.

However, a suspicious transaction will often be one which is inconsistent with a customer's known, legitimate business or personal activities or with the normal business for that type of account.

Therefore, the first key to recognition is knowing enough about the customer and his business to recognize that a transaction, or series of transactions, is unusual.

The following activities may indicate money laundering is taking place. This list is not all-inclusive, but can help insurance companies recognize ways laundering may approach them or their agents.

• The customer seeks to make purchases with large amounts of cash, cash equivalent or checks drawn on different accounts;
• The customer refuses or is reluctant to complete an application or to otherwise provide all the required information, or the information provided is false, inconsistent or suspicious in nature;
• The customer attempts to purchase an insurance policy in an amount that is far beyond his, her or its apparent means that has no obvious purpose or where the source or nature of the funds to be used is suspicious;
• The customer wishes to buy an insurance product, but is less concerned with the cost, long-term performance, or economic terms than in early surrender or cancellation;
• The customer seeks to cancel a life insurance policy without regard to penalties;
• The customer demands policy loan or surrender value quickly after policy issuance;
• There is no apparent relationship between the policyholder and the insured or beneficiary;
• The source of the customer's funds is unclear or inappropriate, or does not correspond with the customer's known business activities and financial situation;
• Any activity involving suspected fraudulent sales activities on the part of an agent and/or broker; and
• Failure to comply with application submission or underwriting procedures and guidelines.

Special Investigative Unit (SIU) will be responsible for compliance with FinCEN 314 (a) requests.

The requests are issued by FinCEN. FinCEN acts a "clearinghouse" for many law enforcement organizations seeking money laundering information.

• Organizations include the IRS, FBI, DEA and Secret Service
• 314 (a) requests require financial institutions to a do a one-time check of certain accounts and transactions against a list of persons under investigation for money laundering or terrorist activity.
• New lists are batched and distributed every two weeks, unless FinCEN determines lists are needed more frequently

• FinCEN sends a "Subject Information" Form (314a) to Unum SIU identifying individuals or businesses of interest to FinCEN.
• If Unum has made payments, or is providing insurance coverage to the individual/business identified, a positive response is provided on the 314 (a) form. The 314(a) is then returned to FinCEN.
• If there are no positive responses, Unum does not need to send any information back to FinCEN.
• FinCEN returns the 314(a) to the law enforcement organization that made the request. If the organization wants more detailed info, it will obtain a subpoena or court order for the records that are wanted.