The U.S. Money Laundering Threat Assessment Working Group says variations in states’ approach to regulation may affect efforts to detect terrorists’ use of individual annuities, permanent life insurance products and other life products that have a cash value or come with investment features.
The working group has included a chapter on insurance companies in an overall money-laundering threat assessment.
The Financial Crimes Enforcement Network released a regulation requiring insurers to file suspicious activity reports in 2005, but states’ supervision of insurers’ activities varies from state to state, according to the authors of the report.
“As a result, states report they find it difficult to depend on other states’ oversight of companies’ market behavior,” the authors of the report, drawing on a U.S. Government Accountability Office report that appeared in May 2003.
The National Association of Insurance Commissioners, Kansas City, Mo., says 38 states now have money laundering statutes that affect insurers, 21 have currency reporting requirements, and 1 has a suspicious activity reporting requirement, according to the threat assessment working group report authors.
The decentralized nature of the life insurance sales system plays a role in making life insurers vulnerable to money launders, the authors write.