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September 25, 2003 at 08:00 PM
Treasury Decides Not To Require Photocopying Of Customer IDs
By
Washington
Life insurance companies and agents are praising the Treasury Department for its decision not to require financial institutions to photocopy customer identification documents.
Carl Wilkerson, chief counsel for securities with the American Council of Life Insurers, Washington, calls Treasurys action a sensible result.
ACLI, he says, is gratified Treasury decided to retain its original interpretation that the burden of maintaining photocopies exceeded the benefit.
William Anderson, senior vice president of government affairs with the National Association of Insurance and Financial Advisors, Falls Church, Va., adds that NAIFA is pleased Treasury responded to the concerns of NAIFA members, who sent thousands of letters to the department.
Under current regulations, financial institutions are required to take appropriate steps to verify the identity of their customers.
The requirement is part of the USA Patriot Act, which was enacted by Congress in the wake of the Sept. 11, 2001, terrorist attacks as a means of tracking the funds of terrorist groups and preventing money-laundering.
While photocopying of identification documents is permitted under the current rule, it is not required.
However, Treasury recently reopened the issue and asked for input on whether photocopying of documents should be required.
The life insurance industry strongly opposed such a requirement arguing that it could, in effect, force life insurance agents to take photocopying equipment with them on their visits to clients.
Treasury says it received 9,623 comments opposing any photocopying requirement.
Wilkerson says more than half of those comments came from the life insurance industry. Clearly, he adds, this issue was a lightning rod for public input.
Under the Treasury regulation, all financial institutions must have a customer identification program in place by Oct. 1, 2003.
The program must include reasonable procedures that would collect identifying information about customers opening an account, verify that the customers are who they say they are, maintain records of the information used to verify identity and determine whether the customer appears on any list of suspected terrorists.
In other news, the Senate Banking Committee has approved legislation, S. 1633, that would permanently extend the Fair Credit Reporting Act, but one provision of the legislation is causing concern among life insurers.
Overall, S. 1633 would continue the current preemptions of inconsistent state laws relating credit and information sharing among affiliates.
