Know your customer: New requirement for disability insurance, life insurance.
Principal®, like many financial institutions, is required by federal law to “know our customer” by obtaining and maintaining information about the identity of those who open or hold an account with us. This process provides important information to help prevent the use of financial products in illegal activities, such as funding terrorism and money laundering.
We’re introducing a new Know Your Customer Questionnaire for use with any organization/entity that’s party to a new individual disability insurance or individual life insurance policy, or a nonqualified deferred compensation plan. The questionnaire asks for information needed to help us better understand who we’re doing business with.
What this means for you
Disability and life insurance policies
Beginning April 1, 2021, the Know Your Customer Questionnaire will be required with all new applications for disability insurance or life insurance, where an organization/entity will be either the owner or paying the premiums.
Additional things to know:
- The questionnaire will be required prior to policy issue. If the form isn’t received with the application, a pending requirement for it will appear on your pending business report.
- The form will be available in paper application packages beginning April 1. For disability, the electronic application packages will also include the form. For life, the form will be available as part of electronic application packages at a later date.
- You only need to provide the completed questionnaire for a specific organization/entity one time. We won’t need a new one, for example, when a new participant is being added to an existing plan, unless there has been a significant change in ownership. When you submit an application, be sure to indicate that the questionnaire was previously provided.
- For life insurance applications where the owner will be a trust, a new Trust Certification and Indemnification form should be used instead of the Know Your Customer Questionnaire.
