Datanamix | AML Sanctions Screening

AML Guide for the Insurance Industry

We outline why the insurance industry is a prime target for money laundering, and the associated legal framework to detect and prevent it.

AML Guide for the Insurance Industry

Money laundering and insurance companies

Insurance companies are at risk of falling victim to money laundering criminals because they can:

Structure transactions

Enforce appropriate reports, and

Force employees to collaborate to create the appearance of legitimacy

Single-premium
contracts

This is one of the most common tools used for money laundering within insurance companies. Criminals will, for instance, purchase a single-premium insurance contract with illicit funds, then try to get their money back by submitting fraudulent claims.

Annuity policies & other high-premium saving vehicles

These are also used as a tool for money laundering. By purchasing a product with illegally acquired funds, criminals can receive legitimate income once they begin receiving income from the insurance contract.

Cooling-off
periods

Cooling-off periods present another opportunity for money laundering. Individuals can request a refund of premiums paid during a cooling-off period, or they can overpay premiums on purpose to trigger a refund. The same thing occurs when money launderers surrender their policy at a loss, so that they can get a refund of the money they deposited.

Top-ups

Top-ups, i.e. when someone pays a small initial premium to avoid attracting any regulatory attention - only to then offload additional payments - is another way that criminals use the insurance industry to legitimise illegal funds.

Transfer of ownership

Criminals can also launder money through insurance companies by transferring the ownership of insurance policies, taking out policy loans, or selling their life insurance policy to customers in poor health in the illegal third-party market.

AML Regulations in the Insurance Industry

To prevent money laundering, insurance companies must comply with stringent AML regulations. This includes implementing procedures to detect suspicious activities, ensuring due diligence, and maintaining robust systems for reporting illegal activity.

Know Your Customer (KYC) Requirements

All insurance companies are required to establish KYC procedures so they can identify the individuals they are doing business with and assess the risk level associated with working with them.

This process involves the following:

Collecting personal information to verify an individual’s identity;
Verifying that the credentials received are valid and accurate;
Identifying individuals, legal entities, and foundations that purchase an insurance product; and
Verifying the ultimate beneficiary ownership

As they collect this information, employees should assess the risk level associated with each customer. Does the purpose of the insurance policy seem suspicious, or is the product that they are purchasing one that is commonly associated with money laundering?

Sanctions Screenings

Sanctions screening means insurance companies must verify that a potential customer does not appear on a list that shows individuals or other entities that are barred from purchasing certain life insurance products.

Every life insurance firm must have sanctions screening measures incorporated into their AML programmes block transactions or freeze assets if necessary.
Insurance firms may be required to report the attempted purchase of a life insurance policy to the relevant authorities.
Insurance companies must focus on the sanctions lists that align the most with the risks presented by their specific customers and their jurisdiction.
Screening must occur during customer onboarding.
PLUS there needs to be ongoing screening measures to identify any changes in a customer’s risk profile.
Should a potential client matche to a sanctions list, your insurance organisation must have a procedure in place to confirm their identity and verify they should indeed be on that list.

NOTE: Sanctions programs typically have error detection included to catch employee mistakes or attempts to circumvent the screening process.

Transaction Monitoring

Transaction monitoring is another key aspect of AML compliance for insurance companies.

Per the Bank Secrecy Act, insurance companies must monitor transactions related to permanent life insurance policies, annuity contracts, and any other insurance product that accumulates cash value or has investment features.
Insurance companies must file suspicious activity reports (SARs) with the Financial Crimes Enforcement Network.
- The information on the form must contain client information from a wide variety of sources, including insurance brokers and agents.
- There is a threshold of $5 000, and the form must be filed if there are red flags such as
  - An insurance product that does not meet a customer’s needs
  - An early surrender where the customer pays a penalty
  - Payments or refunds directed to a third party
  - Unusual payment methods and reluctance to provide personal information during the buying process

NOTE: The form insurance companies fill out is unique to them and is different from the one completed by a bank.

Adequate Supervision

To ensure all measures above are properly implemented and enforced, there needs to be adequate supervision within the insurance company.
The board of directors is responsible for executing the AML programme, as well as hiring an AML compliance officer.
Insurance companies must ensure that AML risks are being managed and monitored and that all activities are performed in a compliant manner.
The compliance officer should have expertise relating to AML processes and should serve as a resource for the company when designing and implementing its compliance programmes.

Sanctions lists

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PEP data

Our Politically Exposed Persons (PEP) database covers about 1million records from every country worldwide. Lists also include family members and close associates of PEPs.

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Crime Watchlists

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Adverse media

Bolster your AML compliance with our global adverse media data screening. Screen against more than 60k global news sources with custom keywords.

Adverse Media

Key Industries Solutions

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For a detailed guide on how AML Sanctions Screening applies to your industry, click the relevant icon below.

Financial Institutions

Professional Services

Global Sanctions Lists

The sanctions lists below are included in every sanctions data subscription. Additional sanctions lists can be included on request, please contact support for more information.

United States

Office of Foreign Asset Control (OFAC)

Specially Designated Nationals (SDN), Consolidated Sanctions List (Non-SDN) and various additional sanctions lists (MBS, CCMC, CMIC, CAPTA, FSE, PLC, SSI)

Canada

Global Affairs Canada

Consolidated Canadian Autonomous Sanctions List incl. Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act.

United States

Department of State (DoS)

ITAR Debarred (ITAR), Nonproliferation Sanctions (ISN), Cuba Restricted List

United States

Bureau of Industry and Security (BIS)

Entity List (EL), Denied Persons List (DPL), Military End User List (MEU), Unverified List (UVL)

United States

Financial Crimes Enforcement Network (FinCEN)

311 Special Measures

United States

Department of Homeland Security (DHS)

Uyghur Forced Labor Prevention Act Entity List (UFLPA)

United States

U.S. Customs and Border Protection

Withhold Release Orders

Argentina

Ministry of Justice

Public Registry of Persons and Entities Linked to Acts of Terrorism and Financing (RePET)

Brazil

Brazil Central Bank

Brazil

Brazil Federal Government

Empresas Inidôneas e Suspensas (Disreputable and Suspended Companies)

Brazil

Brazil Tribunal de Contas da União (TCU)

List of individuals disqualified from public service and debarred bidders

European Union

European Bank for Reconstruction and Development

List of Ineligible entities

European Union

Consolidated list of persons, groups and entities subject to EU financial sanctions (CFSP)

United Kingdom

Office of Financial Sanctions Implementation (OFSI)

Financial Sanctions by The Office of Financial Sanctions Implementation (OFSI), part of Her Majesty's Treasury (HMT)

Israel

National Bureau for Counter Terror Financing

Terrorist List National Bureau for Counter Terror Financing of Israel

Belgium

Federal Public Service Finance

National Financial Sanctions

Netherlands

Government of the Netherlands

National Sanctions List Terrorism

France

Ministry of Economy, Finance, and Recovery

List of Asset Freezes (GEL)

Switzerland

State Secretariat for Economic Affairs (SECO)

Consolidated Swiss Sanctions List

Poland

Ministry of Internal Affairs and Administration

List of persons and entities subject to sanctions

United Arab Emirates

Supreme Council for National Security

National Sanctions List with names of individuals and entities identified as

India

Ministry of Home Affairs

Terrorist Organizations and Unlawful Associations List

Singapore

Monetary Authority of Singapore

MAS Enforcement Actions

Singapore

Attorney-General's Chambers of Singapore

Terrorism (Suppression of Financing) Act 2002

Malasya

Ministry of Home Affairs

Ministry of Home Affairs List (Act 613, Section 66B)

Japan

Ministry of Finance

Economic sanctions and target list

South Africa

Financial Intelligence Centre (FIC)

Targeted Sanctions List

South Africa

Financial Sector Conduct Authority

Targeted Sanctions List

South Africa

National Treasury Department

Restricted Supplier and Tender Defaulter Report

Morocco

Commission Nationale chargée de l'application des sanctions (CNASNU)

Local Terrorist List with names of individuals and entities identified as terrorists by CNASNU (Commission Nationale chargée de l'application des sanctions)

Nigeria

Nigeria Sanctions Comitee

Nigeria Sanctions Commitee's sanctions list

* Additional sanctions lists can be added on demand. Just reach out to our Customer Success Team.

Politically Exposed Persons

What are Politically Exposed Persons (PEPs)?

Domestic Politically Exposed Person (DPEP)

These are individuals who hold prominent public positions within their own country.

This includes:

Heads of state or government
Senior politicians, government ministers, and judiciary officials
Senior executives of state-owned corporations
High-ranking military officials.They are classified as DPEPs due to their potential access to public resources, which could make them vulnerable to corruption or abuse of power.

Foreign Politically Exposed Person (FPEP)

These are individuals who hold, or have held, similar high-level roles in foreign countries. FPEPs are foreign officials or their associates who might also be in a position to abuse their influence for personal or financial gain.

Examples include:

Foreign heads of state or government officials
Senior politicians or diplomats from foreign governments
Foreign judges or military leaders

Domestic Politically Influenceable Person (DPIP) - Family Members

These are close relatives of Domestic PEPs (DPEPs).

Family members can include:

Spouses or partners
Children and their spouses or partners
Parents, siblings, or other close relatives. Due to their relationship with a politically exposed person, they may have access to privileged information or influence, which makes them susceptible to exploitation or corruption.
Close associates are individuals who are closely connected to a PEP, either socially or professionally.

Foreign Politically Influenceable Person (FPIP) - Close Associates

These are individuals who maintain close business or personal relationships with Foreign PEPs (FPEPs).

A close associate could be:

Business partners
Close friends or advisers
Legal representatives or those with significant control over a PEP’s assets FPIPs are often involved in business dealings or transactions that may raise concerns about conflicts of interest or the misuse of political connections.
Close associates are individuals who are closely connected to a PEP, either socially or professionally.

Each of these classifications is used in anti-money laundering (AML) and know-your-customer (KYC) processes to identify and mitigate risks associated with potential corruption or financial crimes. Identifying these individuals helps institutions flag potentially suspicious activities that may be linked to political influence.

Smart screening technology for effective AML compliance

Less False Positives and False Negatives

Name matching is the real challenge in Sanctions & AML compliance. Transliteration issues, nicknames, honorifics, and spelling errors are some of the factors that make name screening a challenge. This cannot be solved with simple fuzzy algorithms.

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Name matching explained

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Easily integrated into your own system environment

Integrate Business Partner Screening with your own system environment by simply using our REST API, our Sanctions Database Exporter option, or our pre-built integrations for SAP, BigID and API3 Airnode.

Sanctions & AML API

Developer friendly, easy to implement and Enterprise-ready RESTful API with a guaranteed uptime of more than 99.99% and > ~200ms response time.

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API Integration

Crime Watchlists

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FBI and Interpol Data

Gain access to our comprehensive global Criminal Watchlists database covering more than 8k records.

Updated Every 60 Minutes

Mitigate sanctions risk with hourly data updates. Audit relevant timestamps for increased transparency.

Smart Matching Technology

Maximise the benefits of our screening technology: Significantly reduce false negatives and false positives, and boost accuracy.

FBI and Interpol Watchlists

FBI's Most Wanted & Fugitives

The FBI's Most Wanted list is maintained by the FBI and publicly available on their website. Removal from the list typically occurs only upon capture, death, or dropped charges.

*Only available on our Standard Plan

Why AML compliance is important

For businesses to actively prevent financial loss and reputational damage, it's crucial that comprehensive due diligence processes are carried out.

Datanamix’s due diligence product suite includes AML (anti-money laundering) sanctions screening, PEP (PIP) data, Adverse Media and Crime data – all customisable depending on your specific industry, and unique business needs.

Datanamix offers a suite of AML Sanction Screening products to enable the right level of risk mitigation for every class of business – from accountable institutions bound by the FIC Act, to SMEs simply looking to protect their interests.

Datanamix due diligence product suite includes AML (anti-money laundering) Sanctions Screening, PEP (PIP) data, Adverse Media and Crime Data – all customisable depending on your specific industry, and unique business needs.

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Adverse Media

Adverse Media Screening is the process of monitoring public sources, like news and social media, to detect negative information about individuals or organisations. It helps businesses identify risks such as criminal activity, fraud, or regulatory violations, which could harm their reputation or legal standing. Used for risk assessment and compliance (e.g., anti-money laundering or Know Your Customer regulations), adverse media screening is often automated to handle large volumes of data and provide real-time alerts. It's a key part of due diligence and risk management strategies.