• Insurance

    Some services provided by insurance companies are attractive to criminals wanting to launder the proceeds of crime and to finance terrorism.

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Insurance Companies

What are the ML/TF Risks?

The insurance sector provides a diverse range of products to customers via an equally diverse range of distribution channels.

The majority of insurance products do not deliver sufficient functionality and flexibility to be the first choice of product to launder money or fund terrorist activity through. However, the funds used to purchase them could be the proceeds of crime.

The Money Laundering and Terrorism Financing (ML/TF) risks associated with the insurance sector include:

  • Payments or receipts from third parties;
  • Cash payment of premiums;
  • Premium overpayment;
  • Frequent payments (outside of a normal regular premium policy);
  • Significant flexibility as to how investments are managed to be liquidated quickly (via surrender or partial withdrawal) and without prohibitive financial loss;
  • Products that are traded on a secondary market; and
  • Products that can be used as collateral for a loan.

Insurance companies must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures as a critical first step in complying with AML/CFT laws.

What are the AML/CFT obligations?

In developing responses to obligations under AML/CFT laws and regulations the following steps must be undertaken:

  • Conduct a Money Laundering and Terrorism Financing Risk Assessment;
  • Develop an AML Program that is proportionate to ML/TF Risks;
  • Establish effective Board and Senior Management oversight of the AML/CFT Program;
  • Appoint an AML Compliance Officer;
  • Establish a Customer Due Diligence (CDD) Program including collection and verification of know your customer (KYC) information including Enhanced and Ongoing CDD controls;
  • Implement a ML/TF Risk Awareness Training Program for staff;
  • Implement a monitoring program to identify unusual and possibly suspicious customer activity, transactions and behaviour;
  • Establish a process to report suspicions and other activity specified by AML/CFT law and regulation;
  • Establish Record-keeping controls; and
  • Maintain the ML/TF Risk Assessment and the AML Program as the business and risks change.

How can AML Accelerate help?

AML Accelerate, drawing on unparalleled expertise and real-world experience, has developed an AML/CFT Program Manual for Insurance businesses.

Our solutions deliver all the foundational AML/CFT materials including a ML/TF Risk Assessment, an AML/CFT Program, CDD Standards, and an AML Operating Manual, which you can tailor to your specific needs, ensuring your AML/CFT controls are commensurate with your business.

Who has used AML Accelerate in this sector?


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