- 35 years experience in insurance company process and compliance consulting, including 10 years of dedicated AML services.
- Specializing in anti-money laundering, combating the financing of terrorism and fraud in the insurance industry.
- Applying hands-on experience with insurance-related technology and operations, business architecture, and business process reengineering
- Customizing federal law compliance to clients' risk profiles an d cost structures
- Implemented Transaction Monitoring Systems or conducted Independent Reviews for 4 of the top 20 insurers
- All 7 Best Practices
- Pre-Call Discovery Process
- One-on-One Call with Expert
- Session Summary Report
- Post-Session Engagement
Anti-Money Laundering - Insurance Companies
- Life and annuity providers struggle with a lack of clear regulatory guidance.
Insurance AML best practices are in the early stages of definition, unlike those for other financial institutions (for example, banks and broker dealers). There remains a lack of definitive guidance as to how AML examiners judge the adequacy of insurers’ AML programs. Each insurer is therefore challenged to define its AML program to satisfy BSA/AML obligations based on its own assessment of risks.
Most struggle to understand how much is enough, and worry about spending too much on an AML program or not implementing enough controls to avoid punitive fines and reputation loss.
Right-sizing an insurance AML program is extremely important for avoiding fines as well as over-spending.
- The multitude of systems and data utilized by Insurers complicates the challenge of establishing adequate monitoring.
Many insurance companies have multiple administration systems due to acquisitions and product expansions.
An insurance company's many administrative systems and data bases provide challenges to monitoring transactions for indicators of money laundering, and tracking transactions at the client level.
- Life and annuity providers' AML compliance departments are dealing with significant resource constraints.
Most insurers’ AML compliance departments are working with inadequate budgets and resources. Medium and smaller insurance companies tend to be resource-constrained while having to deal with the same vulnerabilities, risks, and regulatory expectations of the larger companies with larger compliance budgets.
While regulators are becoming more aggressive and levying ever-higher AML fines on banks, broker-dealers, and MSBs, no insurance company has yet been fined, causing some senior managers to believe (hope) that insurers will not be targeted for fines and penalties.
- Regulatory lapses come with significant consequences for life and annuity providers.
Senior managers, boards of directors, and even compliance officers risk suspension, censure, fines and criminal prosecution. Many insurance companies, particularly smaller ones, often think they won’t be targeted by money launderers and don't need complicated programs and requisite resources.
They also falsely believe that because of their relatively smaller size they are less likely to come under regulatory scrutiny.
FinCEN currently sees smaller companies as higher risk, as most have little or no AML controls to prevent being used for money laundering.
- There is a shortage of qualified AML consultants focused on life and annuity providers.
Life insurance and annuity providers have effectively been deputized by the U.S. government to support the fight against terrorism, illegal drugs, human trafficking and other illegal acts. They are required to have an AML program that is reviewed regularly.
Yet, most top AML consultants are focused on banking and are challenged to provide expert advice for insurance companies. And most AML transaction monitoring systems are designed for banks, and so are wasteful and inefficient for insurance companies.
- Life and annuity providers often deal with a sales staff resistance to AML training.
Many insurers hear the complaint from its agents that “no other company asks me to do this,” even though agents are required by all companies to comply with their training, customer identification requirements and AML policies.
Insurance companies are legally responsible for integrating their agents into their AML programs, and are out of compliance if their agents fail to complete training or to follow their company’s AML processes.