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Insurers Report Structuring, Settling at a Loss as Top Suspicious Activities
By Brian Monroe
printInsurance companies are finding that criminals may be exhibiting the same type of money laundering-related behavior through their products as they do through banks "by structuring deposits and taking a loss on an investment," according to a government assessment of suspicious activity reports. Insurers filed 642 suspicious activity reports between May 2, 2006, and May 1, 2007, the first year they were required to do so, the U.S. Treasury Department's Financial Crimes Enforcement Network said in a report issued Tuesday. That is a fraction of the total SARs filed by other financial sectors in the first year they were required...
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The Financial Action Task Force reiterated its call Monday for anti-money laundering controls by life insurance companies in a report outlining how the industry can apply risk-based checks.
Brian Mannion, of the Nationwide Mutual Insurance Company, spoke with reporter Larissa Bernardes about the possibility of insurance companies receiving enforcement actions, the compliance differences between banks and insurance products and the challenge of independent agent training.
The U.S. Treasury Department's Financial Crimes Enforcement Network issued a rule confirming that precious metals dealers and insurance companies are required to maintain anti-money laundering programs.
To meet certain reporting requirements, banks serving as agents to insurance and mutual fund companies often must identify those firms' customers initiating the underlying transactions. That is no easy task, say compliance professionals.
The growing secondary market for life insurance policies remains a largely overlooked means for money launderers to place money in U.S. banks.
Insurers were on pace to file 280 for the year ended this month, according to a FinCEN study issued last week. That compares with 5,723 SARs submitted by money services businesses in 2002, and 4,267 by securities and futures dealers in 2003, the first years those industries had to file the reports.
Bob Walsh, v.p. of anti-money laundering compliance for AXA Financial, says insurance companies uncertain about their Bank Secrecy Act responsibilities face a number of challenges related to the newness of the requirements and the fact the industry has old systems in place to help them comply.