Questions and Answers
Our IRA accounts roll to an IRA beneficary accounts automatically after we receive death certificates. For purposes of CIP, is the IRA Beneficiary considered a customer at the time we "set" up the account for them or do they become our customer when they actually contact us to withdraw the funds?
The IRA beneficiary is not a “customer” under the CIP regulations and therefore is not subject to the law’s identity verification requirements. However, some institutions do have CIP requirements that call for CIP on beneficiaries. If so, the institution should follow its policy until it is changed. Furthermore, if a new account is established for the beneficiary, then CIP would be required because now the beneficiary would be an account owner and therefore a customer.
(Posted: 02/14/2008)
