The USA PATRIOT Act of 2001 and the U.S. Bank Secrecy Act (BSA) require that every life and annuity company selling covered products have a comprehensive Anti-Money Laundering program.
Each life and annuity provider’s AML program must address the AML risk presented by its products, services, distribution channels, customers, and geographies. The program must include the four AML pillars:
Life and annuity providers are also required to comply with OFAC (Office of Foreign Assets Control) sanctions, restricting the business you can conduct with specific individuals, companies, and countries.
For life and annuity providers, compliance means assessing risk and developing policies and procedures, a training program, and the ability to monitor transactions to detect possible indicators of money laundering or terrorist financing. Life and annuity providers must also be able to file reports in the required timeframe and keep records available for five years.
Like banks, securities firms, and money service businesses (MSBs), life and annuity providers are subject to very stiff criminal and civil penalties for non-compliance with these regulations.