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Accuity Report Outlines How Insurance Firms Can Minimize Money Laundering and Sanctions Risk

White paper offers a call-to-action for insurance firms to follow a committed path to compliance by reviewing the clients they on-board and retain in new and even more critical ways

In response to the widespread regulatory changes in the insurance industry, Accuity, a division of BankersAccuity, has released a white paper providing critical guidance for compliance professionals.

The paper, “Finding Safe Harbor: How insurance firms can minimize anti-money laundering and sanctions risk throughout the policy and payment lifecycle,” examines federal and global anti-money laundering (AML) and trade sanctions laws and the compliance obligations for insurance firms.

“Implementing a truly effective global compliance program requires more than simply accessing the standard sanctions lists. Our white paper aims to dissect the issues and provide guidance on how firms can best prepare,” says Brent Newman, Executive Vice President of Accuity and the author of the report. “The insurance industry must take the necessary steps in complying with current AML and trade sanctions in order to efficiently address regulatory requirements.”

Agencies and regulators such as FinCEN, OFAC and the U.S. Treasury, under the provisions of the USA PATRIOT Act, are monitoring products and customers that carry the highest risks associated with money laundering, terrorist financing or corrupt practices. The paper states that to effectively protect against potential AML violations, an insurer must implement comprehensive processes to ensure compliance. One such method would be to implement a risk-based workflow solution that screens throughout the entire payment and policy workflow cycle, particularly in the areas related to client on-boarding, premium collection and claims settlement.

Primary points in the white paper include:

  • The regulator’s perspective: Enforcement actions for prohibited transactions have nearly doubled from 2009 to 2010. As a result, firms are becoming increasingly aware of the need to remain responsible for compliance on all covered products they sell, whether through their own agents or third-party distributors.
  • How firms should approach increased risk: To ensure maximum compliance, companies must monitor all covered products and their subsequent transactions for suspicious activity.
  • Signposts for an effective compliance program: Identifying and deploying a technology solution that can accept and screen a wide variety of data from multiple sources is essential to managing a robust screening and compliance program.
  • Screening processes to employ in order to achieve highest possible data quality: AML and Know Your Customer (KYC) screenings for maximum operational efficiency and lowest achievable risk are a must for sanction screenings.
  • How to deploy screening efforts and resources across the enterprise: Taking the necessary steps to create an effective screening process while minimizing costs and utilizing resources efficiently.