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Insurance Companies and Anti-Money Laundering
Question: What are the requirements with which insurance companies must comply when establishing an anti money laundering program?
Answer: Under the Bank Secrecy Act, certain insurance companies in the United States engaged in the business of issuing or underwriting permanent life insurance policies (other than group life insurance policies), annuity contracts (other than group annuity contracts), and other insurance products with cash value or investment features are subject to establishing an anti money laundering program. These insurance companies are required to develop and implement a written, risk-based anti money laundering program capable of identifying, assessing and mitigating the risk that their business will be used to facilitate money laundering. The program must be approved by senior management and made available to the Department of the Treasury (or its delegate) upon request. The minimum components of such an anti money laundering program include the following:
- Customized training unique to the institution's system.
- A compliance officer who is responsible for ensuring effective implementation of the program.
- The development of policies, procedures and internal controls designed to comply with the requirements of the Bank Secrecy Act and to prevent the insurance company from being used by money launderers.
- The ongoing training of appropriate persons concerning their responsibilities under the program.
- Independent testing to monitor and maintain an adequate program.
The aforementioned components are minimum requirements; insurance companies that offer a diverse range of insurance products may opt for a more comprehensive anti money laundering program.
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The Edcomm Group is a 19-year old multimedia training company specializing in the banking industry. The Edcomm Group offers programs such as Compliance, Teller, BSA, AML, EEO, Sexual Harassment, Elder Financial Abuse, Bank Risk, Credit Risk Management, Fraud Prevention, Security, Ethics, OSHA, Lending, Sales & Service, System Simulations, Retail Systems, System Conversions, Leadership & Operations Management. To learn more, please contact Dr. Linda Eagle, President of The Edcomm Group, at 888-433-2666 or linda.eagle@edcomm.com, and visit us on the web at www.bankersacademy.com.
First published on BankersOnline.com 4/21/08
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