Email Signature Template - Guggenheim Life

GUGGENHEIM LIFE AND ANNUITY COMPANY

401 PENNSYLVANIA PARKWAY, SUITE 300

INDIANAPOLIS, INDIANA 46280GUGGENHEIMLIFE.COM

AML POLICY | 07/2015 [email protected] | 800 767 7749 PHONE | 317 574 6253 FACSIMILE | PAGE 1 OF 18

Guggenheim Life and Annuity Company

ANTI-MONEY LAUNDERING POLICY AND PROCEDURES

EFFECTIVE: JULY, 2015





Anti-Money Laundering Policy and Procedures

Contents

Definitions............................................................................................................................................................... 3

Statement of Policy and Procedures .................................................................................................................... 4

Training ................................................................................................................................................................... 8

Independent Audit.................................................................................................................................................. 9

Monitoring and Reporting ..................................................................................................................................... 9

Procedures ........................................................................................................................................................... 10

Civil and Criminal Penalties ................................................................................................................................ 12

Updates, Modifications and Exceptions ............................................................................................................ 12

Information Sharing with Law Enforcement and Supervisory Authorities ..................................................... 12

Appendix A – Anti-Money Laundering Compliance Officers ........................................................................... 13

Appendix B – Anti-Money Laundering Compliance Committee ...................................................................... 14

Exhibit A – Suspicious Activities Guidance – “Red Flags”.............................................................................. 15

Exhibit B – Guggenheim Internal Form 101 Suspicious Activity Report (“SAR”) .......................................... 17

Exhibit C - Customer Identification Program Notice......................................................................................... 18





Definitions

MONEY LAUNDERING

Money Laundering is engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that

the unlawful proceeds appear to have derived from legitimate origins or constitute legitimate assets. Generally, money

laundering occurs in three stages: placement, layering and integration.

PLACEMENT

Placement is the first stage of money laundering where cash first enters the financial system. Cash generated from criminal

activities is converted into monetary instruments, such as money orders or traveler’s checks or deposited into accounts at

financial institutions.

LAYERING

Layering is the second stage of money laundering where funds are transferred or moved into other accounts or other financial

institutions to further separate the money from its criminal origin.

INTEGRATION

Integration is the third stage of money laundering where the funds are reintroduced into the economy and used to purchase

legitimate assets or to fund other criminal activities or legitimate businesses.

SENIOR FOREIGN POLITICAL OFFICIAL

Senior Foreign Political Officials are the senior officials in the executive, legislative, administrative, military or judicial branches

of a foreign government, a senior official of a major foreign political party, a senior executive of a foreign government-owned

corporation, or any corporation, business, or other entity that has been formed by, or for the benefit of, one or more senior

foreign political figures.

CRITICAL INFRASTRUCTURE PROTECTION

The Office of Critical Infrastructure Protection (“CIP”) and Compliance Policy coordinates the development and implementation

of policies regarding: the protection of the critical infrastructure of the financial services sector, including the Department's lead

agency role with respect to the financial sector; the development of statutes and regulations within the financial sector,

including money laundering, internet gambling and identity theft; and the sharing of information among financial institutions

and between the private and public sectors, including financial privacy and the sharing of suspicious information pursuant to

the Bank Secrecy Act.

LIMRA

LIMRA International is a worldwide association providing research, consulting, and other services to nearly 850 insurance and

financial services companies in more than 60 countries. LIMRA was established in 1916 to help its member companies

maximize their marketing effectiveness.

OFAC - OFFICE OF FOREIGN ASSETS CONTROL

The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and

trade sanctions based on US foreign policy and national security goals against targeted foreign countries, terrorists,

international narcotics traffickers and those engaged in activities related to the proliferation of weapons of mass destruction.

OFAC acts under Presidential wartime and national emergency powers, as well as authority granted by specific legislation, to

impose controls on transactions and freeze foreign assets under U.S. jurisdiction.





FOREIGN SHELL BANK

Refers to an offshore bank without a physical presence in any country.

HIGH RISK JURISDICTIONS

Link to List of High Risk Jurisdictions This list includes: (i) countries subject to OFAC sanctions, including state sponsors of

terrorism; (ii) countries identified as supporting international terrorism under section 6(j) of the Export Administration Act of

1979, as determined by the US Secretary of State; (iii) jurisdictions determined to be “of primary money laundering concern”

by the U.S. Treasury Department; (iv) jurisdictions or countries identified as non-cooperative by the Financial Action Task

Force on Money Laundering; and (v) the twenty countries ranked with the highest risk in Transparency International’s

Corruption Perceptions Index.

LEGAL AND REGULATORY ACTIONS

Include: (i) a felony criminal conviction; (ii) an expulsion or current suspension from membership or participation in a self-

regulatory organization (e.g., FINRA, MSRB) or the foreign equivalent of a self-regulatory organization, or a domestic or

foreign securities or futures exchange; (iii) a bar or current suspension imposed by the Securities and Exchange Commission

(“SEC”) or other self-regulatory organization or foreign financial regulatory authority; (iv) a denial or revocation of registration

by the SEC, the Commodity Futures Trading Commission (“CFTC”), or a foreign financial regulatory authority; or (v) a finding

that a member or person associated with a member has made false statements in applications or reports made to, or in

proceedings before, a self-regulatory organization.

Statement of Policy and Procedures

Guggenheim Life and Annuity Company and its affiliates, Clear Spring Life Insurance Company and Paragon Life Insurance

Company of Indiana (collectively the “Company”) are strongly committed to preventing the use of its operations for money

laundering or any activity which facilitates money laundering, or the funding of terrorist or criminal activities. Accordingly, this

policy is developed in compliance with the USA PATRIOT Act of 2001. The Company will comply with all applicable laws and

regulations designed to combat money laundering activity and terrorist financing, and will cooperate with the appropriate

authorities in efforts to prevent any such misuse of Company products or assets. Every employee and independent agent is

required to act in furtherance of this policy statement the (“Company AML Policy”) to protect the Company from exploitation by

money launderers or terrorists. In furtherance of this Policy, the Company identifies here an AML Compliance Committee,

consisting of the Company’s chief compliance officer, general counsel, and certain compliance, finance, and accounting

officers (to be specified).

The Company’s AML Policy is intended to supplement, but does not replace, the Anti-Money Laundering Policy promulgated

by Guggenheim Capital, LLC on December 9, 2014. A link to the Guggenheim Capital AML Policy is provided here.

As directed by this policy, the Company will:

Take reasonable steps to determine the true identity of all customers;

Not knowingly accept funds from or conduct business with customers whose money the Company believes is derived

from criminal activity or is intended to conduct, finance or support terrorist activities;

Not ignore indications that a customer’s money originated from criminal or other money laundering activities or is

intended to conduct, finance or support terrorist activities;

Take appropriate measures, consistent with the law, when the Company becomes aware of facts which lead to a

reasonable suspicion of customer activity;

Cooperate fully with law enforcement and regulatory agencies to the extent that it can do so under all applicable foreign

and domestic laws;

http://oneguggenheim/Compliance/Restrictions/Overseas_Business_Travel_Countries_requiring_preapproval.docx?Source=http://oneguggenheim/Compliance/Pages/default.aspx

http://oneguggenheim/CentralPolicyPortal/Policy Documents/Anti-Money Laundering Policy.pdf





Report all identified instances of suspicious activity to the extent that it can do so under all applicable laws; and

Comply with all anti-money laundering and anti-terrorism laws and regulations.

SCOPE

All Company employees, officers and independent agents are subject to this policy and:

Are required to read the AML Policy;

Are required to attend regular AML training programs if their position is designated by this policy as requiring such;

Should avoid drawing conclusions about customers and their activities based solely on the customer’s religious affiliation,

ethnicity or national origin; and

All employees are prohibited from informing independent agents or customers that their activities have been, may be or

will be reported as suspicious or under investigation.

COVERED PRODUCTS

The Company’s policy is aimed specifically at covered products. In this context, the Company’s “covered products” are

defined as the following types of annuity contracts:

individual annuities

fixed or variable; and

immediate or deferred.

STATUTORY PROHIBITION AGAINST DISCLOSURE

There are statutory and regulatory prohibitions against the disclosure of information filed in, or the fact of filing, a Suspicious

Activity Report (“SAR“) whether the report is required or is filed voluntarily. Thus, the Company, its employees and

independent agents are specifically prohibited from disclosing that a SAR has been filed (or that the Company has received a

copy of filed joint SAR from another financial institution involved in the same transaction) or the information contained therein,

except to appropriate law enforcement and regulatory agencies.

If the Company is served with any subpoena requiring disclosure of the fact that a SAR has been filed, or of a copy of the SAR

itself, except to the extent that the subpoena is submitted by an appropriate law enforcement or supervisory agency, the

Company should neither confirm nor deny the existence of the SAR. The Company also should immediately notify the Office of

Chief Counsel at the Financial Crimes Enforcement Network (202) 728-8071.

Any Company employee who violates any applicable AML law or regulation, whether through intentional non-compliance,

willful blindness or negligence, is subject to disciplinary action, such as probation, remedial training, adverse impact on

promotions or compensation reviews, or termination. Also, if any Company employee intentionally violates any applicable AML

law or regulation, this will be reported to regulatory and law enforcement officials in accordance with local laws and

regulations.

DESIGNATION OF ANTI-MONEY LAUNDERING COMPLIANCE OFFICER AND AML COMPLIANCECOMMITTEE

The persons listed on APPENDIX A are the designated AML Compliance Officers (“AMLCO”) with overall responsibility for the

Company’s Anti-Money Laundering Program (“AML Program”).





They are responsible for, among other things:

Being thoroughly familiar with

The operations of the business itself;

All aspects of the Company anti-money laundering program;

The requirements of the Bank Secrecy Act;

Applicable Financial Crimes Enforcement Network forms and

Having read carefully all applicable documents issued or posted on the web page of the Financial Crimes Enforcement

Network of the United States Department of the Treasury: www.fincen.gov

Developing a Risk-Based Program;

Monitoring of the Company’s compliance with applicable anti-money laundering laws and regulations and with the

AML Program;

Being available to answer all questions posed by employees;

Updating the AML Program as and when necessary;

Providing AML training and periodic retraining for employees, independent agents, brokers, and any others doing

business with covered products;

Designing AML training programs so that these parties have the knowledge necessary to comply with the AML

Program; and

Reviewing all reports, known as “Guggenheim Form - Suspicious Activity Report – Internal (“SARI”),” from

employees and independent agents of suspicious activity and taking suitable action with respect to such SARI

reports.

Any questions regarding this policy or any suspicious questions or actions by customers should be brought promptly to the

attention of the AMLCO.

AML COMPLIANCE COMMITTEE

APPENDIX B lists the designated members of the AML Compliance Committee.

TRAINING

Know Your Customer (“KYC”) / Customer Identification Program (“CIP”) - Overview

Following Know Your Customer and Customer Identification Program (“CIP“) policies and procedures decreases the chance

that you or the Company will be used to facilitate money-laundering activities. In fact, knowing your customer is the single

most important deterrent to money laundering. It is unacceptable behavior to knowingly accept funds from or conduct business

with customers whose money the Company believes is derived from criminal activity or is intended to conduct, finance or

support terrorist activities.

Customer Profile

The vast majority of customers are not involved in money laundering, so it is important that you be able to identify routine

transactions versus suspicious transactions. Performing a needs analysis for a customer not only helps you meet the Know

Your Customer requirements but also benefits our business.





A complete profile for each customer provides you and the Company the ability to:

Verify the identity of the customer;

Have independent agents visually inspect and make copies of customer driver’s licenses or other customer identification

documents to verify the applicant’s identity;

Collect identifying information about the customer, including:

Full legal name;

Residential address (no P.O. boxes);

Social Security Number (“SSN”) or Tax Identification Number (“TIN”);

Date of birth;

Ensure the financial information that you need to gather for KYC purposes is information you would normally collect in a

needs analysis;

Identify appropriate transactions and those that may need heightened scrutiny;

Detect a pattern of activities that is inconsistent with a customer's stated goals and business;

Detect inconsistent patterns of transactions;

Anticipate activities that may or may not be related to money laundering and may require further investigation.

Enhanced Due Diligence

A customer's location, affiliation or type of business may raise red flags (see additional red flags in Exhibit A) that indicate a

need for increased scrutiny. For example, regulators have identified Senior Foreign Political Officials as individuals that require

greater due diligence. This enhanced due diligence will be conducted by the Company. If an employee becomes aware that a

third party requires enhanced due diligence per this section, the employee must escalate the high-risk third party to the

appropriate senior manager and the AMLCO for approval. Enhanced due diligence might include more in-depth identification

of owners and principals and searches of available litigation, public records, and/or press or media coverage. The AMLCO

must obtain approval from the senior business unit manager and consult with Guggenheim Capital‘s Chief Legal Officer prior

to approving1 a business relationship with a high-risk third party listed below.

A “Foreign Shell Bank”

Individuals or organizations identified from a screening review (e.g., Thomson Reuter’s World-Check) and

confirmed as high risk by an AMLCO2

1 The Chief Legal Officer may, at his discretion, identify a high-risk third party or a type or group of third-parties that does not require

consultation to establish a business relationship. The Chief Legal Officer may, at his discretion, recommend that the approval to establish a

business relationship with a high-risk third party be escalated to other senior managers in the business unit or entity, or to a governance

committee of the Firm.

2 The AMLCO will provide a report on positive matches to Guggenheim Capital’s Chief Legal Officer on a quarterly basis.





Foreign corporations and individuals that are residents of or nationals of “High Risk Jurisdictions” Link to List of High

Risk Jurisdictions

Individuals and entities, domestic or foreign, subject to “Legal and Regulatory Actions”

Additional high-risk third parties include: (i) privately held armament manufacturers, dealers and intermediaries (if

known to the Company); (ii) privately held paper currency intensive businesses (e.g., money transfer agents,

money brokers, casinos, check cashers, pawnbrokers); and (iii) privately held dealers in precious metals or jewels.

Record Retention

Federal rules require that all records mandated under the AML regulations:

Be kept for five years; and

In a reasonably accessible place and manner.

In addition, all documents related to the opening of accounts and verification of identity as part of a Critical Infrastructure

Protection (“CIP”) must be retained for five years after the account is closed and the termination of any policy or

contractual agreement with the customer.

If a particular state insurance regulation requires certain documentation to be retained for a longer period, the records

must be maintained for the longer time period.

Make sure you file any customer identification information you obtain in the customer file along with any information you

have provided to the AMLCO.

By documenting your actions, you protect yourself from possible penalties.

As an independent agent, your responsibility does not end after the initial sale is made. If any of your future interactions

with the client seem suspicious, notify the AMLCO.

Periodic Reassessment

The Company will establish procedures to periodically review its population of third parties in order to assess if any changes

have occurred that would warrant enhanced due diligence or escalation of approval (i.e., a high risk party). The frequency

and extent of this assessment should be risk-based and may involve obtaining or updating documentation.

Training

EMPLOYEE TRAINING

All employees of the Company will be provided a copy of this policy and will be required to read the policy. In addition to

mandatory periodic review of this policy, training will be provided to those employees whose job responsibilities include:

Direct customer contact;

Access to view and/or execute customer transactions;

Processing payments to or from clients or vendors;

Supervisory authority over any employee whose responsibilities are referenced in this section.

This training will take place at the time of implementation of this policy and at least once annually thereafter. All new hires will

be provided a copy of this policy as a part of new employee orientation. New hires requiring training will be provided such as a

part of new employee orientation. Documentation of employee training will be maintained by the HR department of the







Company. The AML Training Program will consist of a review of these Procedures and any additional programs and materials

as the AMLCO officers deem necessary or appropriate from time to time.

INDEPENDENT AGENT TRAINING

All independent agents who are actively producing business for the Company will be required to complete the Company’s

training program at the implementation of this policy or at the time of their initial appointment, if later. This program will consist

of paper or web-based training requiring the independent agent to read the AML Policy and complete a series of questions to

confirm the independent agent’s knowledge of the program. The Company’s administrative system will maintain a record of the

independent agent’s compliance with this training program. If the independent agent is in default, no contract provided through

this independent agent will be processed until the independent agent fulfills the training requirement under this policy.

The Company has determined that all agents will be required to complete training through our appointed training vendor,

LIMRA or through a training program or provider which is reasonably acceptable to the Company.

Independent Audit

There will be a periodic independent audit to test and evaluate compliance with and the effectiveness of the Company’s AML

Program. The internal audit department of the Company will perform this audit annually.

Monitoring and Reporting

SUSPICIOUS ACTIVITIES

Employees and independent agents are responsible for identifying the expected activities of your customers in order to

establish a range of typical actions. Any fact or circumstance that falls outside this range of typical actions is termed a “red

flag” by FinCEN and should be considered suspicious or unusual, especially where the economic gain is not obvious or clear.

If you suspect or know that a transaction involves funds related to an illegal activity or is designed to avoid regulations, you

must report the transaction to the Company's AMLCO by completing Guggenheim Form – Suspicious Activity Report – Internal

(EXHIBIT B).

Through performance of their daily activities, all employees and independent agents shall monitor customer activity.

Although no single activity or factor is necessarily indicative of suspicious activity, all such instances of a single activity or

factor that could be indicative, but not necessarily indicative of suspicious activity, should be reported to the AMLCO.

The AMLCO will evaluate such single, potentially suspicious activities together with other factors, such as length of time the

Company has known the customer.

All employees and independent agents of the company should frequently review and become familiar with attached EXHIBIT

A, “Suspicious Activity Guidance,” that provides an extensive list of “red flag” events indicating suspicious activity.

(NOTE: This list should not be considered comprehensive or all-inclusive. Each independent agent or employee must

understand the intent of the law so that any suspicious activity – whether listed specifically herein or not – is detected and

reported to the AMLCO.)





Procedures

SUSPICIOUS ACTIVITY REVIEW

If you identify a suspicious activity, you must not notify the customer.

Employees and independent agents are prohibited from

Informing customers that their activities have been or may be reported as suspicious,

That a Suspicious Activity Report – Insurance Company is filed, or

That an ongoing investigation regarding activities in his or her account is being conducted.

In the event that any employee or independent agent becomes aware of any activity listed in EXHIBIT A - “Suspicious Activity

Guidance – “Red Flags” attached to this policy, then that individual is required to immediately complete the EXHIBIT B -

Company Form - Suspicious Activity Report - Internal (“SARI“) and submit it to their supervisor and the AMLCO for review.

The AMLCO will notify senior business unit management and Guggenheim Capital‘s Chief Legal Officer.3

In the event that any employee or independent agent becomes aware of any activity not listed in EXHIBIT A, but that the

individual feels may qualify as suspicious activity under this policy, then that employee or independent agent is required to

immediately complete the SARI and submit it to the AMLCO for review.

Any employee or independent agent receiving an inquiry regarding the AML Policy should immediately document this inquiry

on a SARI and submit it to the AMLCO.

RECEIPTS LOG

The New Business Department will maintain a log of all receipts of

Certified or Cashier’s checks

Any other unusual method of payment and

Federal wire transfers.

COMPANY FORM: SUSPICIOUS ACTIVITY REPORT - INTERNAL (“SARI”) AND FINCEN FORM:SUSPICIOUS ACTIVITY REPORT (“SAR”)

AMLCO will perform the following procedures:

Review and investigate all SARI submissions;

No later than 30 days following the discovery of any known or suspected activity, take proper action either to dismiss

each SARI, or to complete and file with FinCEN a FinCEN Form 101 - Suspicious Activity Report (EXHIBIT B); and

Review cashier log quarterly for presence of any pattern or suspicious activity; and,

Provide initial AML training and periodic retraining for

3 The Chief Legal Officer may, at his discretion notify other senior managers, including those in the relevant business unit or entity, or to a

governance committee of Guggenheim Capital.





Employees,

Independent agents,

Brokers, and

Any others doing business with covered products

WORLD-CHECK COMPLIANCE

Testing

The Company must determine, within a reasonable period after an account is opened or a policy is purchased, whether the

applicant’s name appears on a list of known or suspected money launderers, terrorist organizations, and other criminals

maintained by the Treasury Department’s Office of Foreign Assets Control (“OFAC“), called the Specially Designated

Nationals and Blocked Persons list.

Before issuing an insurance policy or annuity, and on a periodic basis, the AML Compliance Officer will check to ensure that

the names of any contract owners, annuitants and beneficiaries do not appear on the OFAC “Specially Designated Nationals

and Blocked Persons” List (“SDN List“) and that such persons are not known to reside in, do business in, or engage in

transactions with people or entities from, embargoed countries and regions listed on the World-Check Web Site.

The AML Compliance Officer will run the same check on any person due to receive any distribution or benefit payment from an

insurance policy or annuity (including any policy loan, withdrawal, surrender, annuity payment or payment of a death benefit)

before such distribution or benefit payment is made.

No Matches: The AML Compliance Officer will retain copies of all search results of names against updated World-Check

lists.

False Positives or Possible Matches: In the event that a search result yields a “hit” or exception, the AML Compliance

Officer will request additional identifying information from the affected person. The AML Compliance Officer will review the

additional documentation to determine whether the “hit” is a false positive or a possible World-Check match.

If the “hit” or exception is a false positive, the AML Compliance Officer will sign, date and make a notation on the

exception report that the “hit” is a false positive, not a match, and will file the supporting documentation with the exception.

If the identifying information provided by the affected person is insufficient to resolve the “hit” or exception, the AML

Compliance Officer will make a determination whether to conduct enhanced due diligence in an effort to resolve the

exception.. The AML Compliance Officer will file and retain the exception report, resolution (e.g., false positive), and the

copies of the supporting documentation. The AML Compliance Officer will provide a report on positive matches to

Guggenheim Capital’s Chief Legal Officer on a quarterly basis.

“Notice to Customer” Form

As part of the Company’s CIP program, a Notice to Customer must be given to every applicant for a covered product (EXHIBIT

C). The purpose of a Notice to Customer is to disclose the Company’s intent to verify the customer’s name and personal

information. The degree of verification effort required will be determined by the extent of the risk, such as the amount of

premium deposit or unusual circumstances involving the transaction. Applicants who refuse to provide personal information

will be declined.

Company is prohibited from:

Accepting cash (coin or currency), money orders or travelers checks for any transaction;

Accepting negotiable checks drawn on independent agent accounts;





Accepting foreign checks;

Accepting personal checks drawn on anyone other than the contract owner with the exception of checks drawn on the

account of legal guardian of a minor, parent or grandparent of a minor;

Civil and Criminal Penalties

The penalties associated with money laundering are severe. Fines may be twice the amount of the transaction up to $1 million.

Property involved in the transaction may also be subject to seizure and forfeiture. Employees of financial institutions can be

fined individually and sentenced to up to 20 years of imprisonment for knowing or being willfully blind to the fact that the

transaction involved illegal funds.

You can protect yourself from charges of willful blindness by reporting any suspicious behavior to the AMLCO and keeping

documentation of your report.

Updates, Modifications and Exceptions

The Company shall update the AML Program as necessary to maintain its effectiveness. Updates to the AML Program shall

be undertaken based on the recommendations of the AML Compliance Officers, the results of testing and any changes in the

Company’s legal duties.

The AML Compliance Officers may make such modifications and exceptions to the policies and procedures implementing the

AML Program as the AML Compliance Officers deem reasonable and appropriate, provided that such modifications or

exceptions are consistent with the Company’s policy to maintain reasonable and effective policies and procedures to detect

and deter money laundering, terrorist financing and transactions prohibited under any applicable anti-money laundering laws.

Any such modifications or exceptions shall be documented in writing by the AML Compliance Officers.

Information Sharing with Law Enforcement and Supervisory Authorities

NOTE

The following policies and procedures apply to all transactions involving the Company, not just those involving Covered

Products.

GENERAL

A federal law enforcement agency or other law enforcement or supervisory authority investigating terrorist activity or money

laundering may request information from the Company to facilitate an investigation. The Company shall cooperate with lawful

requests for information from such authorities.

DESIGNATED CONTACT PERSON

The AML Compliance Officers are the point of contact for the Company for investigative issues or similar requests for

information from law enforcement or supervisory authorities. All such requests shall be referred to the AML Compliance

Officers.





Appendix A – Anti-Money Laundering Compliance Officers

PRIMARY CONTACT

Stephen M. Coons

Chief Compliance Officer and Chief Legal Officer

317 574 2661

Kimberly Davis

Senior Vice President and Assistant Treasurer

317 574 2056





Appendix B – Anti-Money Laundering Compliance Committee

Stephen M. Coons

Chief Compliance Officer and Chief Legal Officer

Kimberly Davis

Senior Vice President and Assistant Treasurer

Ellyn M. Leonard

Vice President, Accounting and Assistant Treasurer

Joseph Bentivoglio

Senior Vice President, Administration

Judith Eppich

Vice President, Policy Service/Claims





Exhibit A – Suspicious Activities Guidance – “Red Flags”

BUSINESS RED FLAGS

Red flags to watch for during transactions involving the sale and issuance of new business include the following:

The customer buys an insurance product that appears to be inconsistent with his or her needs.

The source of the funds used to purchase the product is inconsistent with the customer’s financial situation or profile.

The applicant exhibits unusual concern with government reporting requirements, especially those requiring personal

identification information.

The applicant wishes to engage in a transaction that lacks business sense or apparent investment strategy or is

inconsistent with the applicant’s stated business strategy.

The applicant appears to be acting as an agent for an undisclosed party or principal but is reluctant or refuses to provide

information about that party.

The applicant (or a person associated with the applicant) has a questionable background or is the subject of news

reports indicating possible criminal, civil or regulatory violations.

The applicant provides inconsistent answers to questions or misleading information.

The applicant lives in a distant locale, though a comparable policy could be purchased where he or she lives.

The customer shows little or no concern for the investment performance of an insurance product but much concern about

its withdrawals and surrender provisions.

The applicant exhibits a lack of concern for policy fees and charges, especially early surrender charges.

The applicant is rated and shows casual disregard for the higher premiums he or she will pay due to the rating.

The customer is reluctant to provide identifying information when purchasing an insurance product

The customer provides minimal or seemingly fictitious information.

The customer exercises the “free-look” privilege shortly after the policy is issued.

PREMIUM AND DEPOSIT RED FLAGS

Red flags associated with premium and deposit payments include the following:

Any unusual method of payment, particularly by cash or cash equivalents

Payments received from unrelated third parties

Payments that are made through wire transfers of sizable amounts

The purchase of an insurance product with monetary instruments in structured amounts (“structured settlements”)

The purchase of an insurance policy with numerous checks drawn on different accounts

Large payments that are followed closely by requests for partial surrenders or policy loans





POLICY ACTIVITY RED FLAGS

Many policy transactions, such as a change in policy dividend options, are a normal part of insurance transactions and

insurance business. Red flag activities are any that are unusual or atypical. Examples include the following:

The early termination of an insurance product, especially at a cost to the customer or where cash was tendered and/or

the refund check is directed to an apparently unrelated third party;

Lack of policy owner concern or questions about surrender charges when requesting a policy surrender;

The transfer of policy ownership to an apparently unrelated third party;

Borrowing the maximum amount available in the policy soon after its purchase;

A pattern of recurring policy loans with prompt repayments;

Payment of unscheduled premiums, followed shortly by one or more policy withdrawals; and

Any request that a transaction be processed in a manner such as to avoid normal documentation or normal procedures.

PRODUCER AND EMPLOYEE RED FLAGS

Not all red flags arise from the customer’s side of the transaction. Some are raised by suspicious activity demonstrated by the

producer or a company employee. Usually these red flags relate to a change in the producer’s sales activity or employee’s

behavior. The change may be observed by the producer’s or employee’s manager, a field compliance principal or a

compliance officer. However detected, the matter is escalated to the company’s chief compliance officer or AML Compliance

Committee. There may well be valid reasons for observed changes, but those would be determined only after a compliance

review.

The following examples illustrate activity that suggests a need for closer review 4:

Agent Sarah has been an average producer in the agency for the three years she has been associated with it. This

year, she suddenly (and unexpectedly) exhibited a dramatic increase in sales, especially with limited premium

permanent life insurance policies. Many of those policies have experienced frequent loans and withdrawals.

Employee Bill has always had a modestly comfortable lifestyle. In the past several months, he has been spending

money like there’s no tomorrow, from major home improvements and a new sports car to dining out frequently and

taking expensive vacations.

Producer Daryl experiences consistently high activity in single premium contracts that exceed company averages.

Agent Steve anxiously asks a compliance department employee what she may know about a case being reviewed

by the company’s AML compliance committee. (Note: For privacy reasons, most financial services companies

prohibit producers from obtaining personal customer information at the company level.)

Broker Karen writes a high number of policies for customers who live away from her normal business market,

although many are returned during the free-look period.

4 From “Anti-Money Laundering for the Insurance Industry”, ©2008 by WebCE, Inc. Reprinted with permission.





Exhibit B – Guggenheim Internal Form 101 Suspicious Activity Report (“SAR”)

[Remainder of page intentionally left blank]

InternalCompany Form

SAR-01November 2014

Suspicious Activity Report(Part of the Company's Anti-Money Laundering Program)

Items marked with red asterisk * are required

Guggenheim Lifeand Annuity Company

Is this an amendment to an existing report? Yes No If yes, date of original filing: nmlkj nmlkj

Part I Submitter's Information

1 Last name:*

2 First name:* 3 Middle Initial:

6 Relation of Submitter to the Company:*

6

6a If employee, position:

6b If other, explain:

7 Street address of office(s) where activity occurred:* 8 Work phone number:*

(no dashes)

9 City:* 10 State:* 11 Zip: * 12 Country (if not US):

Part II Subject's Information

13 Subject is an:* Individual Entitynmlkj nmlkj 14 Check if: Multiple Subjects Subject's Information Unavailablegfedc gfedc

15 Entity Name:

N/Agfedc

15a Type of business: 15b FEIN/TIN # (no dashes):

16 Individual Last name: 17 First name: 18 Middle Initial:

19 Street Address: 20 Phone number:

21 City: 21 State:

22 Zip: 23 Country (if not US):

24 DOB:

25 Subject's role in suspicious activity:

26 Government issued identification(if available):

6

26a ID Number: 26b Issuing State or Country:

Part III Suspicious Activity Information

27 Amount involved in this report:

$ .00

Amount Unknown

No Amount Involved

gfedc

gfedc

28 Type of suspicious activity: Money laundering

Terrorist financing

29 Date range of suspicious activity: from

to

gfedc

gfedc

30 Covered product type (Check all that apply):

Annuity Contract Permanent life insurance policy Other (Explain in Part IV)

30a Policy/Contract number(s) in connection with suspicious activity:

Closed/Terminated Closed/Terminated

gfedc gfedc gfedc

gfedc gfedc

31 Structuring (Check all that apply):

Alters transaction to avoid BSA recordkeeping requirement

Multiple transactions below BSA recordkeeping threshold

Suspicious inquiry by customer re BSA recordkeeping rqmts

gfedc

gfedc

gfedc

Alters transaction to avoid CTR requirement

Other

gfedc

gfedc

32 Money Laundering (Check all that apply):

Suspicion concerning the source of funds

Suspicious designation of beneficiaries, assignees or joint

owners

Suspicious EFT/wire transfers

Suspicious receipt of government payment/benefits

Transaction out of pattern for customer

gfedc

gfedc

gfedc

gfedc

gfedc

Suspicious use of multiple accounts

Suspicious use of noncash monetary instruments

Suspicious use of third-party transactors (straw-man)

Other

gfedc

gfedc

gfedc

gfedc

33 Identification/Documentation (Check all that apply):

Changes spelling or arrangement of name

Multiple individuals with same or similar identities

Provided questionable or false documentation

gfedc

gfedc

gfedc

Refused or avoided request for documentation

Single individual with multiple identities

Other

gfedc

gfedc

gfedc

34 Other Suspicious Activities (Check all that apply):

Account takeover

Bribery or gratuity

Counterfeit instruments

Elder financial exploitation

Excessive insurance

Excessive or unusual cash borrowing against policy/annuity

Forgeries

Identity theft

Little or no concern for product performance, tax or surrender

charges

Misuse of "free look" period

Misuse of position or self-dealing

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

Suspected public/private corruption (domestic)

Suspected public/private corruption (foreign)

Suspicious life settlement sales insurance

(i.e.Viaticals)

Suspicious termination of policy or contract

Suspicious use of informal value transfer system

Suspicious use of multiple transaction locations

Transaction with no apparent economic, business

or lawful purpose

Two or more individuals working together

Unauthorized electronic intrusion

Unclear or no insurable interest

Unlicensed or unregistered money services business

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

gfedc

Proceeds sent to or received from third partygfedc Other gfedc

Part IV Suspicious Activity Information - Narrative

Explanation/Description of suspicious activity(ies). The completion of this section is critical. The care with which it is completed my determine whether or not thedescribed activity and its possible criminal nature are clearly understood by the Company's AML Compliance Officer. Provide a clear, complete and chronological narrativedescription of the activity. The narrative should address as much of the information listed in the checklist as possible. Information already provided in earlier parts of thisform need not be repeated if meaning is clear.

a. Describe conduct that raised suspicion.

b. Explain whether the transaction(s) was completed or only attempted.

c. Describe supporting documentation.

d. Explain who benefited, financially or otherwise, from the transaction(s), how much andhow (if known)

e. Detail relationship (or lack thereof) between insured, policy/contract owner, beneficiary& person/entity paying premiums.

f. Indicate any frequent or unusual changes in policy

g. Specify an unexplained death or payment to a beneficiary in a foreign jurisdiction

h. Indicate whether US or foreign currency and/or US or foreign negotiable instrument(s)were involved. If foreign, provide the amount, name of currency and country of origin.

i. Indicate any wire transfers in or out and identifier numbers, including the transfercompany's name.

Part V SAR Report Certification

Signature of Submitter:* X Date:*

Attach all supporting documentation (file formats accepted: pdf; doc; docx; xls; xlsx; ppt; jpg; gif; tif)

File Description:

File Description:

File Attachment

File Attachment

Submit

For AML Compliance Officer Use Only

Date report received: ______________________

Notes:

Conclusion of findings:

Activity as described would not constitute violation of the policy; no action necessary or taken

Report has been investigated and no violation of policy has occurred; no action necessary or taken

Report has been investigated and will be officially reported to authorities per proper procedure

nmlkj

nmlkj

nmlkj

Signature:`X __________________________________________________ Stephen M. Coons, Chief Legal Officer, Insurance

Date: _____________________





Exhibit C - Customer Identification Program Notice

IMPORTANT INFORMATION YOU NEED TO KNOW ABOUT OPENING A NEW ACCOUNT

To help the government fight the funding of terrorism and money laundering activities, federal law requires financial

institutions, including insurance companies, to obtain, verify and record information that identifies each person who opens an

account.

This notice answers some questions about Guggenheim’s Customer Identification Program.

WHAT TYPES OF INFORMATION WILL I NEED TO PROVIDE?

When you open an account, your firm is required to collect the following information:

Name

Date of birth

Address

Identification number:

U.S. citizen: taxpayer identification number (Social Security number or employer identification number)

Non-U.S. citizen: taxpayer identification number; passport number and country of issuance; alien identification card

number; or government-issued identification showing nationality, residence and a photograph of you.

You may also need to show your driver’s license or other identifying documents.

A corporation, partnership, trust or other legal entity may need to provide other information, such as its principal place of

business, local office, employer identification number, certified articles of incorporation, government-issued business

license, a partnership agreement or a trust agreement.

U.S. Department of the Treasury, Securities and Exchange Commission, NASD and New York Stock Exchange rules already

require you to provide most of this information. These rules also may require you to provide additional information, such as

your net worth, annual income, occupation, employment information, investment experience and objectives and risk tolerance.

WHAT HAPPENS IF I DON’T PROVIDE THE INFORMATION REQUESTED OR MY IDENTITY CAN’T BEVERIFIED?

Guggenheim may not be able to open an account or carry out transactions for you. If Guggenheim has already opened an

account for you, we may have to close it.

WE THANK YOU FOR YOUR PATIENCE AND HOPE THAT YOU WILL SUPPORT THE FINANCIALINDUSTRY’S EFFORTS TO DENY TERRORISTS AND MONEY LAUNDERERS ACCESS TO AMERICA’SFINANCIAL SYSTEM.

Note: Doing business as Guggenheim Life and Annuity Insurance Company in California