5 Scenarios

Possible Scenarios

Everyday cases that an insurance broker may encounter in their daily Due Diligence practice

1

The Market Stall Merchant

Mr. Ramon, a 58-year-old merchant with an appliance stall at the Central Market, requests a life insurance policy with savings component for DOP 500,000. He pays his taxes as a small taxpayer and presents his ID card, individual tax number, and savings account statements. His business generates approximately DOP 80,000 monthly according to his declaration.

Brief Reflection

This is a typical low-risk client case. The consistency between the economic activity, declared income, and the requested insurance amount is reasonable. The documentation presented allows verification of identity and activity. However, it is important to confirm that the tax registration information is up to date and that the account statements reflect movements consistent with a retail merchant.

Critical Reflection Questions
  1. What additional documents could strengthen this client's KYC profile?
  2. How would you verify that declared income is consistent with their activity?
  3. What red flags would you look for in the account statements?
2

The Independent Professional

Dr. Carmen Mejia, a dentist with her own practice in Santiago, requests professional liability insurance for DOP 3,000,000. She presents her medical license, professional credentials from the Dominican College of Dentists, tax registration, and tax returns from the last two years showing annual income of approximately DOP 2,500,000.

Brief Reflection

The profile corresponds to a liberal professional with complete and verifiable documentation. The insurance amount is appropriate for her professional practice. The existence of consistent tax returns and valid professional credentials are positive indicators. This client qualifies for Simple or standard DD.

Critical Reflection Questions
  1. Why is it important to verify that the medical license and professional credentials are current?
  2. What additional information would be useful to obtain about her professional practice?
  3. How would your analysis be affected if declared income were significantly higher or lower?
3

The Family SME

Perez Brothers Furniture SRL, a family business with 15 years in the market, requests fire and theft insurance for their commercial premises and warehouse for DOP 8,000,000. The legal representative presents articles of incorporation, tax registration, audited financial statements, and a list of the three partners (all siblings from the same family).

Brief Reflection

Family businesses with track records are generally lower risk. The business longevity, presentation of audited financial statements, and clear corporate structure are positive elements. It is important to identify the Ultimate Beneficial Owner (which in this case are the three siblings) and verify that the company has no negative history.

Critical Reflection Questions
  1. What verifications would you perform on the three partners as Ultimate Beneficial Owners?
  2. Why is it relevant that the financial statements are audited?
  3. What additional information would you request about the insured premises and warehouse?
4

The Corporate Employee

Juan Carlos Rodriguez, operations manager at a multinational company, requests to increase his group life insurance with a personal savings rider for an additional DOP 1,200,000. He presents an employment letter confirming his salary of DOP 180,000 monthly and his 7-year tenure at the company.

Brief Reflection

Employees of formal companies with documented salaries represent low risk. The ratio between monthly income and the additional amount requested is reasonable (approximately 6.6 months of salary). The stable and verifiable employment relationship facilitates validation of the source of funds.

Critical Reflection Questions
  1. What ratio between income and insurance coverage do you consider reasonable?
  2. How would you verify the authenticity of the employment letter?
  3. What other documents could support their ability to pay the premium?
5

The Dominican Retiree

Mrs. Mercedes, a 67-year-old retiree who worked 30 years as a teacher, requests major medical expense insurance. Her social security pension is DOP 35,000 monthly. She wishes to pay the annual premium of DOP 45,000 with her savings. She presents pension certification and savings account statement.

Brief Reflection

Retirees with documented and verifiable income sources represent low risk. The consistency between her work history (teacher for 30 years), her current pension, and her medical insurance request is logical. The premium amount is affordable considering her accumulated savings throughout her working life.

Critical Reflection Questions
  1. What special considerations apply to senior citizen clients?
  2. How would you evaluate whether the savings presented are consistent with their work history?
  3. What additional information would be prudent to request about the insurance beneficiary?

Want to Deepen Your Learning?

Visit the ADOCOSE Campus to access complete courses on Due Diligence and ML/TF/PADM prevention.

Visit ADOCOSE Campus
Reference Material
  • UAF 2026 Due Diligence Guide: Chapters on identification and verification of individual clients
  • Law 155-17: Articles on obligations of reporting entities
  • FATF Recommendations: Recommendation 10 on Customer Due Diligence
  • ADOCOSE Virtual Campus - DD and Compliance Courses
5 Scenarios

Stressed Scenarios

Normal situations with one modified factor: reduced time, increased values, incomplete documentation

1

The Urgent Annual Premium

An existing low-risk client wants to pay their annual premium of DOP 250,000 in advance, but needs to do it today because they are traveling early tomorrow for three months. The insurer's system will be under maintenance for the next 4 hours and only 2 hours remain in the workday. The client offers to pay in cash to "expedite."

Brief Reflection

The client's urgency is legitimate but time pressure should not compromise DD processes. Cash payment of DOP 250,000 requires source of funds documentation according to regulations. It is preferable to offer alternatives (wire transfer, check) or schedule payment for when the system is available, rather than compromise controls.

Critical Reflection Questions
  1. How would you handle client pressure without compromising DD processes?
  2. What payment alternatives could you offer that comply with regulations?
  3. What minimum documentation would you require if cash payment were unavoidable?
2

The Sudden Coverage Increase

A company that has been a client for 5 years requests to triple their cargo transportation insurance coverage, going from DOP 10,000,000 to DOP 30,000,000. They explain they won an important tender and need the additional coverage for next week. They do not have updated financial statements from the last year.

Brief Reflection

A significant coverage increase requires client profile update and Enhanced DD. Although the 5-year relationship generates trust, the material change in risk profile requires validating the economic capacity for the new level of operations. The absence of updated financial statements is a flag that must be addressed.

Critical Reflection Questions
  1. What minimum documentation would you require before approving the increase?
  2. How would you verify the existence of the mentioned tender?
  3. What temporary options could you offer while DD is completed?
3

The Representative Without Power of Attorney

A company's accountant requests to renew the employee group insurance. They have the legal representative's ID, the company's tax registration, and a signed check, but no updated power of attorney. The insurance expires tomorrow and the legal representative is on a business trip to Europe, unavailable due to the time difference.

Brief Reflection

Verification of legal representation is a fundamental DD requirement. Although the situation is understandable, proceeding without valid power of attorney exposes the broker to legal risks. Communication with the representative should be sought (email, message) or verification of whether a previously registered general power of attorney exists.

Critical Reflection Questions
  1. What alternatives exist to validate the legal representative's authorization remotely?
  2. Is email authorization acceptable? Under what conditions?
  3. What risks do you assume if you proceed without complete documentation?
4

The Express Beneficiary Change

A client with a DOP 5,000,000 life insurance policy requests to change the beneficiary from their spouse to their brother. They explain they are in the middle of divorce proceedings and want to make the change "before she finds out." They request the process be done today and that the current beneficiary not be notified.

Brief Reflection

Changing beneficiaries is the policyholder's right, but the described circumstances generate red flags. The urgency, family conflict context, and request for confidentiality toward the current beneficiary should be documented. It is important to follow standard procedure without accelerating due to client pressure.

Critical Reflection Questions
  1. What additional verifications would you perform for this type of request?
  2. Is it appropriate to comply with the request not to notify the current beneficiary?
  3. What information about the new beneficiary do you need to obtain and verify?
5

The Policy with Partial Documentation

An international NGO requests civil liability insurance for DOP 15,000,000. They present documentation from their headquarters in Switzerland, but their incorporation documents in the Dominican Republic are still in process. They offer a commitment letter to deliver complete documentation within 30 days.

Brief Reflection

Non-profit organizations and entities with international presence may present documentation complexities. However, DD requires verifying legal incorporation in the country. A commitment letter does not substitute for required documentation. A provisional policy with limited term may be considered while the process is completed.

Critical Reflection Questions
  1. What specific risks do NGOs present in terms of ML/TF?
  2. What documentation from the Switzerland headquarters would be relevant to verify?
  3. What would be acceptable conditions for provisional coverage?

Want to Deepen Your Learning?

Visit the ADOCOSE Campus to access complete courses on Due Diligence and ML/TF/PADM prevention.

Visit ADOCOSE Campus
Reference Material
  • UAF 2026 Due Diligence Guide: Sections on DD in special situations and compliance deadlines
  • Decree 408-17: Articles on required documentation and exceptions
  • SB Insurance Circular: Beneficiary change procedures
  • ADOCOSE Virtual Campus - Complex Case Management
5 Scenarios

Extreme Scenarios

Atypical situations with conditions that significantly deviate from normal

1

The Client with 50 Policies

A businessman requests to consolidate 50 different life insurance policies (with different insurers) into a single DOP 500,000,000 policy with you. He explains that he has been buying small policies for 20 years and now wants to simplify. He has no organized documentation of all existing policies or of the payments made over the years.

Brief Reflection

The accumulation of multiple small policies to later consolidate is a known structuring technique. The total amount is extremely high and the lack of organized documentation is a critical red flag. This case requires exhaustive Enhanced DD, verification of the source of all historical funds, and probably a report to the UAF.

Critical Reflection Questions
  1. What structuring patterns might be present in this scenario?
  2. How would you proceed to verify the legitimacy of the 50 existing policies?
  3. At what point would this case warrant a SAR (Suspicious Activity Report)?
2

The Immediate Total Surrender

A client who 6 months ago acquired a life insurance policy with investment component for DOP 25,000,000 (paying single premium) requests immediate total surrender. They accept losing 40% of the value due to penalties. When you ask the reason, they vaguely respond that "a business opportunity arose" and they need the money "as soon as possible."

Brief Reflection

Early surrender with significant loss on a recent high-value policy is a major red flag. This pattern is consistent with using insurance for money laundering: introducing illicit funds and withdrawing them "clean" as an insurance surrender product. This case should be reported to compliance and probably generate a SAR.

Critical Reflection Questions
  1. Why is early surrender with losses a ML red flag?
  2. What additional information would you try to obtain before processing the surrender?
  3. What is your obligation as a broker in this situation?
3

The Newly Incorporated Company with Mega-Policy

A company incorporated 45 days ago requests an industrial all-risk insurance for DOP 800,000,000. The partners are two foreign citizens (one from a FATF high-risk country) who entered the country 2 months ago. They present a newly opened bank account with an initial deposit of DOP 50,000,000 whose origin they declare as "capital contribution from international investors."

Brief Reflection

This scenario presents multiple critical red flags: new company without track record, recent foreign partners, one from a high-risk country, extremely high amount, and difficult to verify source of funds. It requires Enhanced DD with exhaustive verification of Ultimate Beneficial Owners, source of funds, and possibly coordination with the UAF before proceeding.

Critical Reflection Questions
  1. How many red flags do you identify in this scenario?
  2. What verifications would you perform on the foreign partners?
  3. Under what circumstances, if any, would you proceed with this request?
4

Payment from Multiple Accounts

A client wants to pay the annual premium of DOP 3,000,000 through 15 transfers of DOP 200,000 each, from 15 different bank accounts in the names of 15 different people. They explain these are "loans from family and friends" who are helping them because they had a temporary liquidity problem.

Brief Reflection

Payment splitting from multiple sources is a classic structuring technique to avoid controls. Regardless of the explanation, this pattern should be rejected and reported. There is no legitimate justification for a personal insurance to be paid by 15 different third parties.

Critical Reflection Questions
  1. Why is payment splitting a ML red flag?
  2. How would you respond to the client's explanation about the "loans"?
  3. What immediate action would you take in response to this request?
5

The Beneficiary on OFAC List

During routine verification of a renewal, you discover that the beneficiary of a current life insurance policy appears on the OFAC sanctions list, added 3 weeks ago. The policyholder is a client of 10 years with no negative history. The policy has a value of DOP 20,000,000.

Brief Reflection

A beneficiary appearing on sanctions lists is a critical situation requiring immediate action. Regardless of the historical relationship with the client, there is a legal obligation to freeze any related transaction and report to competent authorities. The client must be informed of the situation.

Critical Reflection Questions
  1. What are the immediate legal obligations upon this finding?
  2. How would you communicate this situation to the policyholder?
  3. What internal procedures should be activated?

Want to Deepen Your Learning?

Visit the ADOCOSE Campus to access complete courses on Due Diligence and ML/TF/PADM prevention.

Visit ADOCOSE Campus
Reference Material
5 Scenarios

Impossible Scenarios

Improbable situations that invite us to think outside the box and propose alternative solutions

1

The Country Without Banking System

A Dominican businessman with legitimate businesses in a country that has just suffered the total collapse of its banking system requests insurance. All his assets in that country (valued at USD 5,000,000) cannot be verified through traditional channels. There are no operational banks, commercial registries are offline, and tax authorities are under reorganization.

Brief Reflection

This extreme scenario forces us to think of alternative verification methods: in-person asset verification, testimonies from reliable third parties, physical documentation, photographs with metadata, reports from international organizations, etc. It also raises the question of whether it is appropriate to assume the risk or wait for normal mechanisms to be restored.

Critical Reflection Questions
  1. What alternative verification methods could be applied in this situation?
  2. What level of residual risk would be acceptable?
  3. How would you document your DD efforts in the absence of traditional sources?
2

The Anonymous Client by Law

A Dominican government intelligence agent, duly accredited by official letter, requests life insurance. For national security reasons, their real identity is classified and they operate under a cover name. They cannot provide their real ID or verifiable personal information.

Brief Reflection

This scenario poses a conflict between two legal obligations: client DD and protection of classified state information. It would require coordination with authorities, possibly a special legal framework, and alternative risk mitigation measures such as direct participation of government institutions.

Critical Reflection Questions
  1. Are there legal exceptions for national security cases?
  2. What alternative verifications could be performed through official channels?
  3. How would you protect your liability as a broker in this situation?
3

DD Without Physical Documents

A client lost all their identity documents, bank records, and personal documentation in a fire. The Electoral Board will take 6 months to issue a new ID. Banks cannot issue account statements because their biometric identification does not match (burns). They need urgent insurance for a loan that will prevent them from losing their business.

Brief Reflection

This scenario makes us consider: What defines identity beyond documents? Possible solutions include: verification by acquaintances, historical records in other institutions, fingerprints in databases, photographs in previous documents, verification of the incident with fire department/police, etc.

Critical Reflection Questions
  1. What alternative sources of identity verification could you use?
  2. How would you balance client urgency with DD requirements?
  3. What temporary solution could be offered while their documentation is restored?
4

The Insurance Broker Without Systems

A massive cyberattack has left all verification systems non-functional: the UAF, OFAC, UN databases, the banking system, commercial registry, and Electoral Board are all offline indefinitely. You have clients with urgent insurance needs and only have the physical documents they present.

Brief Reflection

This scenario reminds us that DD is not just technology, but also professional judgment. Without systems, we depend on: in-person verification, validation of physical documents, customer knowledge, references from reliable third parties, and common sense. It also raises the question of whether it is prudent to operate or suspend activities.

Critical Reflection Questions
  1. What DD processes could you perform completely manually?
  2. What type of operations would you suspend entirely?
  3. How would you document your decisions for later review?
5

Everyone is a PEP

In a small community where you operate, you discover that practically all your potential clients are PEPs or close relatives of PEPs: the mayor, council members, the justice of the peace, the hospital director, the police commander, their spouses, children, and parents. If you apply Enhanced DD to everyone, your business would be operationally unviable.

Brief Reflection

This exaggerated scenario makes us reflect on the proportionality of controls. The solution is not to ignore PEP status, but to develop efficient processes for Enhanced DD that are sustainable. It also raises whether the business model in that location is viable or requires structural adjustments.

Critical Reflection Questions
  1. How would you design Enhanced DD processes that are efficient and scalable?
  2. What technology could help manage a high volume of PEP clients?
  3. Are there lower-risk insurance products that could be offered with standard DD?

Want to Deepen Your Learning?

Visit the ADOCOSE Campus to access complete courses on Due Diligence and ML/TF/PADM prevention.

Visit ADOCOSE Campus
Reference Material
  • UAF 2026 Due Diligence Guide: Chapters on PEP and Enhanced DD
  • FATF Recommendations: Interpretive note on PEP (Recommendation 12)
  • Risk-Based Approach Guide: Proportionality of controls
  • ADOCOSE Virtual Campus - PEP Management
5 Scenarios

Fantastic Scenarios

Imaginary situations that free us from traditional constraints to explore DD concepts from creative perspectives

1

Insurance for the Dragon

A medieval knight requests civil liability insurance for their domesticated dragon. The dragon occasionally burns neighbors' crops and the knight wishes to cover the damages. The dragon has no "ID card," but the knight presents a royal parchment certifying their ownership. How would you perform DD on the "insured asset"?

Brief Reflection

This fantastic scenario makes us think about the essence of DD: verifying legitimacy, assessing risk, and documenting. The "royal parchment" is analogous to a title of ownership. The dragon's risk would require specialized evaluation. The fundamental question remains: can we verify what we are told and reasonably assess the risk?

Critical Reflection Questions
  1. What elements of traditional DD could be applied to this scenario?
  2. How would you verify the authenticity of the "royal parchment"?
  3. What parallels do you find with evaluating unconventional risks in the real world?
2

The Intergalactic Policy

A space corporation requests insurance for their fleet of commercial vessels operating between Earth and a colony on Mars. Payments would be made in a combination of Earth currencies and "Martian credits." The company is headquartered on Earth but its main operations are outside any terrestrial jurisdiction.

Brief Reflection

This scenario poses questions about jurisdiction, currency, and cross-border verification taken to the extreme. What "authority" would verify operations on Mars? How would "Martian credits" be validated? These challenges are amplified versions of real challenges with cryptocurrencies and multinational operations.

Critical Reflection Questions
  1. How would you approach DD when no regulatory jurisdiction exists?
  2. What parallels do you see with verifying cryptocurrency operations?
  3. What fundamental DD principles apply regardless of jurisdiction?
3

The Client Who Lives 500 Years

An elf (fantasy) requests life insurance. They are 347 years old, have a life expectancy of 800 more years, and have accumulated wealth over centuries through investments in different kingdoms. Their documentation includes records from 300 years ago in ancient languages no one speaks anymore. How would you value the risk and verify historical source of funds?

Brief Reflection

This scenario plays with the concept of historical verification. In the real world, we face similar challenges with century-old companies, ancient inheritances, or assets with long ownership chains. How far back does our obligation to verify extend? What level of antiquity makes the origin "acceptable" through the passage of time?

Critical Reflection Questions
  1. How far into the past is it reasonable to verify source of funds?
  2. How would you treat verification of inheritances or very old assets?
  3. What principles would you apply when historical documentation is limited?
4

The Kingdom Where Everyone Tells the Truth

Imagine a magical kingdom where no one can lie (physically impossible). An inhabitant of this kingdom requests insurance and simply tells you: "My income is legitimate, I am not a PEP, and the money comes from my work." In a world without lies, would Due Diligence still be necessary?

Brief Reflection

This scenario invites us to reflect on why we do DD. If we eliminate the risk of false statements, what remains? We would still need to: verify the client correctly understands their situation, document for future reference, assess objective risks, and comply with audit requirements. DD is not just about detecting lies.

Critical Reflection Questions
  1. What DD elements go beyond detecting false statements?
  2. What value does documentation have even when we trust the client?
  3. What risks would remain even with total client honesty?
5

The Quantum Twins

Thanks to a scientific experiment, two identical versions of the same person exist (quantum twins). Both have the same ID, same fingerprint, same credit history, and legally are "the same person." One of them requests insurance, but you do not know if it is the "original" or the "duplicate." How would you perform DD?

Brief Reflection

This science fiction scenario poses questions about identity in the digital age: what happens with perfect identity theft? With duplicated biometrics? With synthetic identities? It reminds us that identity verification must constantly evolve and that no method is infallible by itself.

Critical Reflection Questions
  1. What verification methods would go beyond documents and biometrics?
  2. How do we face the risk of synthetic or stolen identities today?
  3. What verification layers provide greater security?

Want to Deepen Your Learning?

Visit the ADOCOSE Campus to access complete courses on Due Diligence and ML/TF/PADM prevention.

Visit ADOCOSE Campus
Reference Material