AML software for insurance

• Life and investment products: single premiums, early surrenders and cancellations within a cooling-off period can turn illicit funds into a payment from an insurer.
• Third parties: beneficiaries, payers and assignees may differ from the policyholder and must be known too.
• Claims payments: paying a claim to a designated person, or to a party owned or controlled by one, breaches sanctions in any line of business.
• Intermediaries: brokers, agents and managing general agents bring business the insurer did not onboard itself.
• Bordereaux and volume: policyholder data that arrives in bulk files has to be screened without overwhelming reviewers.
• International cover: marine, cargo and reinsurance business reaches many jurisdictions and sanctions regimes.

1. 1

   Know which rules apply

   Identify which products are within anti-money laundering rules and apply sanctions controls across all lines.

2. 2

   Onboard policyholders and intermediaries

   Customer due diligence for life and investment-linked business, including beneficiaries, and KYB on brokers and agents.

3. 3

   Screen at each key moment

   Sanctions screening at underwriting, when beneficiaries change, and before claims, refunds and surrender payments are made.

4. 4

   Apply enhanced due diligence

   Source of funds and source of wealth checks for PEPs and other higher-risk life business.

5. 5

   Re-screen, record and report

   Re-screening the policyholder base when lists change, keeping evidence of every check, and reporting suspicious activity where required.

The FATF Recommendations treat the underwriting and placement of life insurance and other investment-related insurance as financial activity, so customer due diligence (Recommendation 10) and PEP measures (Recommendation 12) apply to it, including measures on the beneficiaries of life policies.

In the UK, the Money Laundering Regulations 2017 apply to life insurance and investment-linked business rather than to general insurance, and the FCA expects authorised insurers and intermediaries to have systems and controls to counter financial crime. In the EU, life insurance undertakings and intermediaries are obliged entities under the EU anti-money laundering framework. In the US, insurance companies issuing covered products, such as certain life insurance and annuity products, have AML programme and suspicious activity reporting duties under FinCEN rules. Sanctions law applies to every insurer and every line of business, including claims payments.

• Batch screening: bordereaux and policyholder files screened in bulk, not one name at a time.
• Real-time screening at claims: an API that can check a payee before a claim is paid.
• Ownership checks: a company lookup that reaches the owners of corporate policyholders, payees and brokers.
• Explainable matches: each alert shows the list and record that matched, so reviewers can clear namesakes at volume.
• Ongoing monitoring: the policyholder base re-screened when lists change, with alerts only on changes.
• Evidence: a record of every check, so a held or released payment can be explained later.