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Osama Bin Laden: What If He Has a Life Insurance Policy?

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The news about Osama bin Laden may be a chance for life insurance claim investigators to raise awareness about the issues that can pop up when cross-border death claims come in.

President Obama announced Sunday that a U.S. Navy special forces team had killed bin Laden in bin Laden’s home in Abbotabad, Pakistan.

Bin Laden himself probably would not have owned a conventional life insurance policy written by a U.S. life insurer, because he spent his life living outside the United States and was a devout Muslim.

Experts in Muslim law have agreed that convention Western life insurance policies are incompatible with Islam, in part because Western policies involve the use of interest payments.

But bin Laden is said to have been somewhat less devout when he was younger, and some of his half-brothers once lived in and around Boston.

If a life insurer, life agency or estate law firm wanted to check to see, for example, whetherDetective someone had given a child life insurance policy to bin Laden or another individual, it could try contacting MIB Solutions Inc., an arm of the MIB Group Inc., Braintree, Mass., and asking to use the MIB Policy Locator Service.

The database provides information on policies issued since December 1996.

Companies seeking information about older policies may want to contact a service that can help with the process of asking large numers of life insurers to see if they have issued a policy to a specific individual.

President Bush issued an executive order freezing bin Laden’s assets Sept. 24, 2001, and other governments around the world also have frozen bin Laden’s assets.

If a life insurer found that it did have a bin Laden policy on its books, or a life insurer or life agency wanted to bring up concerns about an insured client who had died, it could file a suspicious activity report (SAR) with the federal Financial Crimes Enforcement Network (FinCEN), an arm of the U.S. Treasury Department.

The circumstances surrounding Bin Laden’s death point to another complication: The difficulty of verifying whether an individual who has died outside a U.S. hospital has really died.

Few international life insureds are terrorists, drug traffickers or money launderers, but the number who die outside U.S. hospitals is large enough that the topic comes up periodically at life insurance claims conferences.

Harold Nester of Worldwide Resources Inc., Springfield, Mo., is a private investigator who has been

helping life insurers investigate non-U.S. deaths since 1993.

Nester declines to discuss how he would proceed if a life insurer asked him to verify that bin Laden had died, except to say, “It may be my biggest challenge.”

But Nester – who has investigated deaths in Pakistan as well as in other countries – says it is important to recognize that the clerks who prepare death certificates in many developing countries tend to poorly paid and poorly equipped.

The clerks may not have telephones, let alone computers, and they may still be recording deaths by hand in enormous ledgers.

U.S. life insurance claim examiners who are unfamiliar with the state of vital records operations in poor countries may simply ask Nester to try to verify whether a death certificate appears to be a valid certificate, or whether the death certificate looks like the kind of death certificate that might be issued in the country where a death is said to have occurred.

When doing a thorough investigation, “the first thing that you have to do is to be wary of documents,” Nester says.

Getting an “official death certificate” for an individual who is still alive may not be particularly difficult in some countries, and “the records are just as bad now as they were when I started,” Nester says.

An investigator should start by talking to people who were around, or could have been around, when the death occurred, or after an insured died, such as neighbors, police officials, burial societies and crematoria employees, Nester says.

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