Q Capital has a rigorous fraud prevention program in place to ensure that the Company does not purchase any policies where fraudulent activity has occurred. In accordance with its state licensure, Q Capital is obligated to report any suspected fraudulent activity to the applicable state insurance department. Q Capital has developed a program to detect, prevent, eliminate and report suspected fraudulent activity. This program is premised on, but is not limited to, our Best Business Practices and Procedures; Employee Training; the QUOTE system; Reporting; and Continuing Education and Monitoring. Each of these areas are outlined below:
Best Practices and Procedures:
- Brokers – Q Capital requires all brokers with whom it does business to submit a broker application and to provide copies of all their broker licenses. The licenses are then verified with the applicable state insurance departments by the Company’s legal department to ensure that the licenses are accurate and current.
- Institutional Investors – Q Capital only works with institutional investors and will not sell life insurance policies to individual investors.
- Life Settlement Transactions – Q Capital does not purchase “viatical” policies, defined as policies on individuals with life expectancies of two years or less or that have a catastrophic or life-threatening illness.
- Contestability – Q Capital will not buy any polices that are within the contestability period, typically defined as within two years of the date of issue.
- Trust Transactions – Many of the policies that Q Capital purchases are owned by trusts. In such cases, the legal department conducts a thorough review of the trust and confirms the trustee powers.
- Escrow – For all life settlement transactions, even in the unregulated states, Q Capital deposits all funds into an escrow account with an FDIC-insured financial institution.
- Limited Access to Confidential Information – Q Capital limits access to all life settlement files. Hard copies of files are under lock and key with only limited personnel authorized to view such files. All electronic documentation is security controlled through the QUOTE system.
- Anti-Money Laundering, Patriot Act, and Financial Controls – The Q Capital finance department, under the direction of the CFO, has instituted practices and procedures to ensure the highest level of institutional protection for all financial transaction.
- Training – all new employees receive formal training on the Company’s anti-fraud procedures and policies. All employees are required to attend an update training session at least once every six months. All of these sessions are run by the Q Capital’s General Counsel.
- Infrastructure – the Company runs its entire operation on a proprietary software platform, QUOTE. The QUOTE system has built-in tutorials, help menus, and help pages that provide key tools for our associates.
- Anti-Fraud Checks – Each case file reviewed at Q Capital undergoes a mimimum of three anti-fraud checklists. These checklists are based on the statutory and regulatory requirements pertaining to fraud prevention in the states which regulate life settlements. If any instance of underwriting, medical or legal fraud is suspected, the case is immediately frozen in the system and sent to the legal department for a full review.
- Integrated Security Measures – The entire QUOTE system is task-oriented and each employee has access to only those portions of the system that are integral to his/her job. Additionally, the system has the highest level of safeguards to ensure that no unauthorized personnel can alter or manipulate data on any case file.
Q Capital understands that it is under a statutory obligation to report suspected instances of insurance fraud to applicable insurance departments and any other authorized law enforcement agency. The procedures regarding Q Capital’s reporting obligations are detailed in its Anti-Fraud Policy. Q Capital adheres to these requirements in all states, whether or not such reported is in fact statutorily mandated.
Continuing Education and Monitoring
An important component of Q Capital’s Fraud Prevention Program is providing for the continuing education of legal department. Q Counsel’s General Counsel is a regular participant at the quarterly National Association of Insurance Commissioner (“NAIC”) meetings, during which he attends the various anti-fraud meetings reviewing the relevant subject matter. These meetings enable Q Capital to stay on top of the latest insurance schemes and cases of fraud that have plagued the industry, and to understand the latest initiatives and techniques that are being developed by the insurance community to combat insurance fraud.