An annuity contract, other than a group annuity contract and.A permanent life insurance policy, other than a group life insurance policy.What are “covered products”? For purposes of the final insurance company rule, the term “covered product” is defined to mean: Broker-dealers in securities currently are subject to an independent anti-money laundering program obligation under our regulations, 31 CFR 103.120 therefore, the insurance company would not be required to establish a separate anti-money laundering program in order to comply with the final rule, as long as it has established an anti-money laundering program pursuant to that requirement and complies with the program.1 However, the company should evaluate the extent (if any) to which its existing anti-money laundering program should be revised to appropriately address the risks of doing business in covered insurance products.ģ. An insurance company that is registered with the Securities and Exchange Commission as a broker-dealer in securities would not be required to establish a duplicate program under the final rule for insurance companies. Conversely, if an insurance company ceases issuing or underwriting covered products, the insurance company would no longer be subject to the rule. If an insurance company that is not presently issuing or underwriting a covered product should do so in the future, the insurance company would then become subject to the rule (but only to the extent of its business relating to covered products).

For example, a tax-exempt organization that offers charitable gift annuities, as defined in section 501(m)(5) of the Internal Revenue Code, that would not otherwise fall within the definition of an insurance company, would not be considered an insurance company for purposes of the final rule. The phrase “as a business” in the definition of “insurance company” is intended to exclude those persons that offer annuities or other covered products as an incidental part of their business. The term “insurance company” or “insurer” is defined in the final rule to describe any person engaged within the United States as a business in the issuing or underwriting of “covered products.” Covered products, discussed further below, are those insurance products that we have determined to present a higher degree of risk for money laundering. Does the final rule apply to all insurance companies? No. The USA PATRIOT Act further directs the Secretary of the Treasury to prescribe through regulation minimum standards for such programs.Ģ. An insurance company is defined as a “financial institution” under the Bank Secrecy. Recognizing the need for a more comprehensive anti-money laundering regime, Congress passed and the President signed into law the USA PATRIOT Act, which, among other things, requires that all entities defined as financial institutions for Bank Secrecy Act purposes establish anti-money laundering programs. This regulation is a key step in ensuring that the Bank Secrecy Act is applied appropriately to these businesses. The characteristics of financial products, including certain insurance products, make them potentially vulnerable to those seeking to launder money.

Why is the Financial Crimes Enforcement Network issuing a regulation requiring insurance companies to establish anti-money laundering programs? As with all of our regulations requiring the establishment of an anti-money laundering program, we are issuing this regulation to better protect a class of financial institutions – in this case, the insurance industry – from potential abuse by criminals and terrorists, thereby enhancing the protection of the U.S.

We are providing the following “Frequently Asked Questions” to assist insurance companies in understanding the scope of the final rules.ġ.

Suspicious activity report requirements