Delay On Anti-Money-Laundering Rules For Industry Is Welcome
That sigh you heard was the collective expression of relief by the insurance industry, which has been given a reprieve of as much as six months before having regulations imposed to prevent potential money-laundering.
The issue was raised by passage of the USA Patriot Act, approved last year by Congress in response to the Sept. 11 terrorist attacks. Under the law, the U.S. Treasury Department was ordered to develop regulations to discourage and detect money laundering.
The law mandated all industries defined as financial institutions to have anti-money-laundering programs in place by April 24. But the day before the deadline, Treasury announced that it would defer applying any standards on the industry for up to six months while it studied the rules to be imposed and their potential implications.
This was a welcome development, because insurers were concerned about facing overly restrictive and expensive regulations that did not fit the industry. This delay will give the industry time to continue to work with Treasury, and will allow the Feds to come up with sound, industry-specific rules that satisfy the law’s intention without unnecessarily adding to insurer costs.
There is also some confusion about where insurance agencies might fit into this new regulatory scheme, or whether they should be exempt altogether.
The delay, which could be up to six months but could also be much shorter, will give the government time to proceed thoughtfully on this important measure.
Reproduced from National Underwriter Life & Health/Financial Services Edition, May 6, 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.