Life reinsurance, group insurance, term life and credit life should be exempted from the Treasury Departments proposed regulation aimed at combatting money laundering, the American Council of Life Insurers says.
In formal comments filed with Treasury, the Washington-based ACLI says these products do not contain features that lend themselves to be used as money laundering vehicles.
In addition to the requested exemptions, ACLI is asking Treasury to revise its proposed rule to clarify its application to independent agents and to broker-dealers already subject to anti-money laundering requirements.
The National Association of Insurance and Financial Advisors, Falls Church, Va., is also asking Treasury to clarify training requirements that apply to agents and brokers.
The proposed rule requires insurers to provide for on-going training. But NAIFA notes that some independent agents and brokers sell policies for many companies.
Treasury, NAIFA says, should encourage the insurance industry to work together to design acceptable training programs and indicate that outside vendors, including trade associations, can offer training.
This would free individual companies from sustaining duplicative and unnecessary costs to develop and implement virtually identical programs, and producers would not be required to attend duplicative training sessions, NAIFA says.
For its part, ACLI is asking Treasury to resolve issues involving life insurers and independent agents.
The proposed rule suggests that independent agents be “integrated” into a life insurers anti-money laundering program.
But ACLI notes that life insurers would be confronted with a variety of tasks under this standard.
These include renegotiating hundreds, if not thousands, of contracts to obligate agents to provide information to the insurer, ensuring that agents are properly trained, avoiding conflicting programs and auditing agent programs.
ACLI says it recognizes the difficulties for Treasury in developing regulations for a group that is as diverse and decentralized as agents.
“Nevertheless, we believe that it is both unworkable and unduly burdensome to impose the mandate on life insurers to integrate agents into the life insurers anti-money laundering programs,” ACLI says.
ACLI asks Treasury to issue guidance accompanying the regulation to clarify that life insurers are not required to integrate independent agents into their anti-money laundering programs or are required to undertake massive recontracting efforts.
ACLI says independent agents should be required under the regulation to provide certain information to insurers.