A little more than a year ago, the American life insurance industry became subject to the U.S. Treasury Department's Financial Crimes Enforcement Network, which placed the Internal Revenue Service in charge of regulating carriers' anti-money laundering (AML) efforts. The professional services company Ernst & Young recently surveyed the industry and found insurers' AML efforts have turned up only a small amount of suspicious activity.
Dan Higgins, principal in charge of technology enablement with E&Y, believes the manual process used by insurers to combat AML is one reason for the lack of suspicious activity. "There still is quite a bit of manual activity around these processes, and that may drive some lower volumes at this stage," he says.
Don't expect those manual processes to stay around for long, though, according to John Sabatini, senior manager in charge of the technology compliance area for E&Y. "As we meet with some of the insurance companies, we are finding they are building out transaction-monitoring systems and they are becoming more automated," he says.
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