Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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12/06/2005 Insurance Company Suspicious Activity Reporting Rules Seek To Avoid Duplicate Filings
The final regulations imposing suspicious activity reporting requirements on insurance companies contain a number of provisions designed to avoid duplicate filing, such as might occur if an insurance company and one of its agents, the latter registered as a broker-dealer, were to both file SARs.  The preamble to the final regulations indicates that some insurance companies offering variable insurance products funded by separate accounts may qualify as mutual funds, and might have to report suspicious activities relating to the variable products under anticipated final rules imposing a SAR filing responsibility on mutual funds. The preamble states that to avoid a duplicate filing requirement, FinCEN and Treasury “intend to amend this rule to require filing in such cases under the rule for mutual funds when a final rule is adopted.”  The AML and SAR rules concerning insurance companies will be the subject of a revised section in Banoun and Ensminger, Money Laundering, Terrorism, and Financial Institutions, and will also be the subject of a compliance checklist designed specifically for insurance companies.

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