Financial Institution Bond Claims Examples

Insuring Agreement A - Fidelity
An aggressive regional bank purchased a series of small banks in rural communities at a rapid pace to expand its reach in the state. For one of its branches, it paid a significant bonus to recruit the highly respected loan officer in the town, who had 18 years of tenure at the local community bank. The loan officer had little supervision as his direct supervisor was in a city 30 miles away. In the course of an internal audit, a teller mentioned to the auditor that she thought it curious that she had never seen one of the officer’s loan customers. The auditor subsequently pulled the loan and credit files for the customer, and when he drove out to the address listed for the customer, found that the address didn’t exist. Further investigation revealed that the social security number was also falsified and that the customer’s statements - as well as those of other “customers” statements - were being sent to a post office box in the loan officer’s name.