Anti-Fraud Policy
Opulen Capital is committed to dealing in the most ethical manner with all clients, insurers and the public. We are also committed to the good citizenship represented in our effort to work with all parties to fight fraud in the life insurance marketplace. Both the life insurance and the life settlement market demand that consumers and participants engage in the most honest and ethical conduct. This Policy’s intention is to fight dishonest and unethical conduct within our profession and in our public conduct.
Statement of Policy
As part of general operations, Opulen Capital will not knowingly contract, or engage in business for life insurance policies obtained by presenting or concealing materially false information for purposes of misleading another.
Responsibilities
Opulen Capital designates specific individuals (“Compliance and Fraud Review Team”) to conduct a compliance and fraud review which is responsible for ensuring that the anti-fraud procedures listed herein are implemented at all levels and that deviations from these procedures are formally reported to management. If document inconsistencies or activity indicators are noted, a report is made to the Compliance and Fraud Review Team as part of standard procedure. The Compliance and Fraud Review Team, in turn, should make a formal report to management with a recommendation of action. This action may include, but is not limited to, requesting additional information from the insured, advisor, the insured's treating physician or other medical providers, and the insurance company issuing the policy.
Opulen Capital employees are to secure the documents listed below prior to referring a policy for review. These documents will reduce the risk of fraudulently obtained policies entering the market at the buyer level. Subject to verifiable reasons to the contrary, if the listed documents for each policy are not available, Opulen Capital employees should cease any action on such policies.
Policy Documents
1. Current street address (P.O. Boxes are not acceptable) and photo identification of the insured;
2. A copy of the current illustration or signed and dated verification of coverage from the issuing insurance company;
3. A copy of the complete policy of insurance (individual policies);
4. For group policies, a copy of the certificate of insurance and a copy of the group policy handbook or group plan document;
5. A copy of the signed application for the insurance policy issued; and 6. The original or a copy of the life settlement application.
Medical Documents
1. A completed physician's statement that includes the dates that the insured was treated and diagnosed for any material ailments included in the statement;
2. If insured is over the age of 80 or if otherwise required, a current statement signed by the insured's treating physician attesting to the insured's competency to enter into a life settlement contract; and
3. Laboratory reports and supporting physician's notes.
Opulen Capital employees will review submitted policies for potential fraudulent activity and will identify the following potential fraud indicators as part of the process of identifying material inconsistencies.
Document Inconsistencies
1. Alterations to forms (e.g. erasures, white-out, strikeovers, different type inks and handwriting);
2. Outdated information on the life insurance application. (e.g. old telephone number, former address);
3. Mixture of handwriting and typewriting on any documents;
4. Dates on life insurance applications that do not coincide with dates in medical records;
5. Answers on the life insurance application that do not coincide with information found on the life settlement application or in the medical records;
6. Inconsistency in statements (applicant, physician, policy owner);
7. The submitted life insurance policy does not include a copy of the insurance application for that particular policy, if such an application was part of the issued policy;
8. Altered or incomplete medical records;
9. Gross inconsistency in the insured or policy owner signatures;
10. History of prior settlement applications by the same insured or policy owner;
11. Photocopied forms where a typed portion is clearer than the balance of the text;
12. Typed, rather than printed, letterheads or no letterheads;
13. Lack of physicians' signatures on letter of competency, physician's questionnaire and/or diagnosis date confirmation;
14. Altered or incomplete release form for medical records or release of policy information forms; or
15. Unlicensed broker in a state where licensure is required.
Activity Indicators
1. Disagreement of prognosis by insured's attending physicians;
2. Withdrawal of life settlement application by policy owner after questions are asked regarding the life settlement application or an investigation by the company has been started;
3. A policy owner or insured who will not provide a current residential address (non post office box), or a current home address and telephone number;
4. A policy owner or insured who is evasive or becomes irate about important information relating to his/her life settlement application;
5. A policy owner or insured who has purchased multiple life insurance policies within a short period of time;
6. A policy owner or insured who is hesitant to allow direct contact with the life insurance company issuing the policy;
7. Re-submission of an application with new or different data by the same advisor or policy owner of a previously submitted and rejected life settlement application; or
8. The insured moves residences frequently.
Further Action
Employees who identify probable reason to suspect material inconsistencies based on the review of the foregoing items should report such indicators to the Compliance and Fraud Review Team. If the Team cannot resolve the material inconsistency, the Team will contact the owner of the policy for clarification. Failure to resolve the inconsistency with the owner of the policy should void any proposed transfer on that file and may result in forwarding the file to the applicable state Department of Insurance for further review for possible identification of suspected fraud.
At the close of this review process, additional reviews may be conducted by management. Such reviews should consist of a complete review of all documents and executed contracts received from the owner, advisor and the insurance company in connection with any other applications. If suspected fraud is identified, management should immediately suspend any transaction on the files and report a possibility of fraud to the applicable state Department of Insurance with a request for additional guidance.
Review for Material Inconsistency
The Compliance and Fraud Review Team should review all forwarded files containing material inconsistencies. The term "material inconsistency" should mean those items included previously in this document and should include:
1. A difference between the diagnosis dates reported by the insured (either verbally or on the application form), reported in insured’s medical record, or as noted in the original insurance application;
2. A difference between the insured’s medical visitation, hospitalization, or medication records as reported on the application and as set forth on the original insurance application;
3. Any indication that the insured has been declined for health insurance or life insurance which is not noted on the original application for insurance; or
4. A different physician's name reported in the medical records as the attending or treating physician at the time of diagnosis and as reported on the original insurance application.
Reporting
If the Compliance and Fraud Review Team wishes to report suspected fraud, based on the criteria above, the case should be referred to the Senior Vice President of Compliance for subsequent referral to the appropriate regulatory and legal authorities.
Education and Training
All Opulen Capital employees are trained to identify material inconsistencies, to contact the Compliance and Fraud Review Team, and to be aware of the importance of reporting material inconsistencies in any application documents. All employees receive a copy of this Anti-Fraud Policy.
Policy Owner Notification
All unresolved material inconsistencies will be reported to the state Department of Insurance and other legal authorities, as deemed applicable by law. Prior to reporting these material inconsistencies to the state Department of Insurance and other agencies, however, Opulen Capital will ensure that the policy owner or applicant of the suspected application receives written notification of the material inconsistencies. A sample of this approved form of notification is as follows:
Dear Sir (Madam),
We have noted material differences between (use only the applicable reference or specify otherwise):
a. Your application for insurance and your application to us; or
b. Your application for insurance and your medical record as supplied by your physician.
c. Other
Please clarify these inconsistencies with us within the next thirty days (30). Clarification of these matters will allow us to continue to work on your file. Failure to clarify or correct any inconsistencies may result in our submission of your file to the [State] Department of Insurance and/or other governmental agencies for investigation under the laws of [the State].
Sincerely,
(Signed by an officer of the Compliance and Fraud Review Team)
The letter should be accompanied by the documents in question with the material inconsistencies highlighted.
If the policy owner or insured responds to the inquiry within a reasonable amount of time with a plausible explanation of the inconsistency and provides documentation supporting the same, the file may be re-opened for processing and no communication will be made to the Department of Insurance and/or governmental agencies.
