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January 09, 2002 at 07:00 PM
NU Online News Service, Jan. 9, 3:18 p.m. — Washington
Limited service insurance company broker-dealers will be subject to suspicious transactions reporting requirements under a proposed Treasury Department rule.
The proposed rule, which comes in the aftermath of the Sept. 11 terrorist attacks, would eliminate a current exemption from these reporting requirements applied to limited service broker-dealers.
In its notice of proposed rulemaking, Treasury notes that limited service broker-dealers–those which exist solely to sell variable annuity contracts issued by life insurers–have been exempted from the suspicious transactions reporting requirements of the Bank Secrecy Act since 1972.
However, Treasury says, following Sept. 11, Congress passed the USA Patriot Act, which requires Treasury to propose new rules on broker-dealer reporting requirements.
Treasury says it anticipates that in the final rule, the exemption will be withdrawn.
“Once the exemption is withdrawn, persons required to register as broker-dealers in order to offer and sell variable annuity contracts issued by life insurance companies will be required to comply with all applicable BSA requirements,” Treasury says.
Carl Wilkerson, chief counsel for securities with the American Council of Life Insurers, Washington, says ACLI takes the responsibilities contained in the proposed rules extremely seriously.
ACLI, he says, is carefully examining the proposal to determine whether to file comments with Treasury.
David Winston, vice president of government affairs with the National Association of Insurance and Financial Advisors, Falls Church, Va., says NAIFA supported the spirit of the USA Patriot Act when it was introduced.
