Insurance chief issues warning on money laundering
Superintendent sends letter on federal laws
State Insurance Superintendent Eric S. Dinallo warned insurers, brokers and agents to make sure they comply with federal rules intended to prevent money laundering and other illegal transactions.
In a circular letter to licensees, the department cited laws such as the federal Bank Secrecy Act and the Foreign Corrupt Practices Act, as well as Treasury’s Office of Foreign Assets Control, and urges firms to “assess their business models to make sure they comply with these laws.”
The Bank Secrecy Act requires financial companies, including insurers to develop a written program designed to prevent cash value or investment products, such as life insurance or annuities, from being used to launder money or finance terrorism.
The Foreign Corrupt Practices Act bars U. S. businesses and individuals from paying foreign officials, individuals or entities in order to influence official actions, obtain business or seek an improper business advantage. The Office of Foreign Assets Control bans transactions with “specially designated nationals” from other countries who are subject to U. S. government sanctions.
The laws are enforced by federal regulators, and failure to comply — even failure to maintain proper policies and procedures — has led to hefty fines against numerous banks and others in recent years.
“Complying with federal rules aimed at fighting money laundering, bribery and other illegal international transactions is essential,” Dinallo said in a press release. “Those who fail to comply with these complex and technical rules risk criminal penalties, stiff fines and damage to their reputations.”
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