Insurers seem to be doing a good job of telling the U.S. Treasury Department about suspicious activity, and they have uncovered a few transactions that may relate to financing of terrorism, officials say.
Staffers at the Financial Crimes Enforcement Network, an arm of the Treasury Department, have published those findings in a report based on a review of insurer suspicious activity reports..
Since May 2006, a provision in the USA PATRIOT Act has required insurers to file SARs when they see signs that money laundering or transactions connected terrorism or international drug rings might be taking place.
The number of insurer SARs filed increased to 1,276 during the 12-month period that started May 2, 2007, up from 641 during the previous 12-month period.
During the second mandatory insurer SAR reporting year, 86 entities filed SARs, but 628 of the SARs came from subsidiaries of just two parent companies.
Many SARs focus on possible evidence of money laundering, including subjects "using multiple cash equivalents (e.g., cashier's checks and money orders) from different banks and money services businesses to make insurance policy or annuity premium payments," officials write. During the second year of mandatory reporting, "fewer reports cited customers willing to incur significant penalties for surrendering their annuity policy early."
