Treasury Urged To Avoid Undue Patriot Act Regs On Insurers
House Financial Services Committee Chairman Mike Oxley, R-Ohio, is urging the Treasury Department to avoid imposing undue anti-money laundering burdens on the insurance industry.
In a letter to Treasury Secretary Paul ONeill, Oxley said that Congress specifically opposed a “one size fits all” approach when enacting the USA Patriot Act in the aftermath of the Sept. 11 terrorist attack.
The USA Patriot Act requires financial institutions to establish anti-money laundering programs.
Oxley said there is little evidence of money laundering being conducted through insurance products.
“It would be particularly difficult to launder money through property-casualty products or life products without cash value,” he wrote.
“The commensurate requirements placed on underwriters and agents of these products should be correspondingly less,” Oxley said.
Indeed, he said, where an agent, broker or company does not accept cash or cash equivalents in unusually large amounts, imposing the full requirements of the Patriot Act would be an unnecessary burden.
It is important, Oxley said, that Treasury consult and coordinate with state insurance commissioners and the Kansas City, Mo.-based National Association of Insurance Commissioners.
“A two-way dialogue between the insurance regulators and the Treasury Department would help educate both sides to best determine the appropriate level of required regulation,” Oxley said.
The Treasury Department is currently developing regulations to implement the USA Patriot Act, including the nature of requirements that will be imposed on the insurance industry.
Reproduced from National Underwriter Life & Health/Financial Services Edition, April 22, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.