U.S. insurance companies that issue or underwrite products presenting a heightened risk of money laundering, terrorist financing or other illicit activity as covered under the USA PATRIOT Act, were required to establish anti-money laundering programs and file Suspicious Activities Reports (SARs) by May 2.But according to a poll conducted by Deloitte & Touche LLP shortly before the deadline, only one-third of insurers and financial services companies already had a comprehensive AML program in place.
Whether they had an insurance AML program or not, 62% of the respondents said their insurance AML program would reside under the compliance area of their organization, 18% said it would reside in the legal department, 4% in treasury and 4% with the chief financial officer.
One area of the law that raised questions was the treatment of agents and brokers. Insurance companies must provide AML and SARs training to their agents and brokers, and they must be able to prove that those agents and brokers comply with their programs.
Insurers and financial services firms that participated in the Deloitte survey have mixed views about which aspects of dealing with agents and brokers will be the most challenging to implement.
While providing the training was cited as least worrisome, 86% of survey respondents said either performing independent testing of agent activities, developing a process for agents and brokers to escalate suspicious activity, or getting them to follow documented policies would be the most difficult requirement of the law to fulfill.
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