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Anti-Money Laundering ProgramAgent Training

• Presented by
• First Symetra National Life Insurance
• Company of New York
• New York, NY

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Course Overview

• This course will help raise your awareness of
  anti-money laundering (AML) rules so that you
  have the knowledge to help detect and prevent
  possible money laundering. The topics that will
  be covered include

• Federal Regulations
• Training Requirement for Agents
• Covered Products
• Definition of Money Laundering
• Suspicious Activities and Reporting Requirements
• Office of Foreign Asset Control (OFAC)
• Penalties

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Federal Regulations

• The USA PATRIOT Act strengthens anti-money
  laundering (AML) laws, enhances civil and
  criminal penalties for violations, and grants new
  law enforcement and surveillance capabilities.
  The Act resulted from the September 11, 2001
  terrorist attacks.
• AML laws are primarily enforced by the Financial
  Crimes Enforcement Network (FinCEN), a bureau in
  the U.S. Department of the Treasury.

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Federal Regulations (continued)

• Under the USA PATRIOT ACT regulations, insurance
  companies are required to establish an anti-money
  laundering program applicable to its covered
  products with the following elements

• Policies, procedures, and internal controls
  designed to prevent the company from being used
  to facilitate money laundering or terrorist
  financing.
• Compliance officer to administer the program.
• Ongoing training for appropriate persons.
• Independent audit function to test the program.

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Federal Regulations (continued)

• Insurance companies are required to integrate
  their agents into their AML program. This
  includes ensuring that agents receive training
  and that agents gather information necessary to
  help detect money laundering.

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Training Requirement

• Agents licensed to sell one or more of the
  covered products must be trained concerning
  their responsibilities under the AML program.
• First Symetra places on the agency the
  responsibility to monitor that all the agencys
  producers have completed an authorized AML
  training when licensed and annual refresher
  courses thereafter.

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Covered Products

• The regulations are not applicable to all
  insurance products, but only apply to these
  covered products

• Permanent life insurance policies, other than
  group life insurance policies
• Annuity contracts, other than group annuity
  contracts and
• Any other insurance products with features of
  cash value or investment.

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Definition of Money Laundering

• Money laundering is a process by which illegal
  income generated through criminal activity is
  disguised by first placing it with an
  unsuspecting financial institution or business.
• Next the money is moved through layers of
  financial investments until the original source
  of the money becomes obscured or impossible to
  ascertain.
• Finally, the money is integrated into
  legitimate investments or businesses.
• The goal is to make a confusing audit trail so it
  becomes difficult to detect where the funds came
  from.

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Suspicious Activities

• In order to detect money laundering, we need to
  watch for indicators of suspicious customer
  behavior (red flags). Possible indicators are

• Unusual concern for secrecy or concern about
  reporting requirements.
• Reluctance or refusal to provide basic
  identifying information.
• Documents that appear to be false or have been
  altered.

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Suspicious Activities (continued)

• A customer who shows little concern for
  investment risks or charges, but much concern
  about early termination features of the product.
• Purchase of a product inconsistent with the
  customers needs.
• Investments that dont make economic sense.
• An account with a mailing address outside the
  U.S. or Canada.

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Suspicious Activities (continued)

• Trying to establish multiple accounts with no
  reasonable explanation.
• Opening an account in someone elses name without
  reasonable explanation.
• Transferring the benefit of a product to an
  apparently unrelated third party.
• Unclear source of funds.
• Paying cash or money orders for a large amount of
  10,000 or more.

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Suspicious Activities (continued)

• A series of cash payments of just under 5,000
  (cash transactions of 10,000 or more must be
  reported).
• Premiums that seem to exceed the customers
  resources.
• Requests to convert cash to checks or other
  non-cash instruments.
• Sudden and unexplained requests for wire
  transfers or wire transfer requests that dont
  clearly identify the originator or recipient.

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Suspicious Activities (continued)

• Early termination of a product, especially at a
  cost to the customer, or where payment is made
  by, or the refund check is directed to, an
  apparently unrelated third party.
• A customer who borrows the maximum amount
  available soon after purchasing the product.

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Reporting Suspicious Activities

• Agents are often in the best position to detect
  suspicious activity, so they must notify the
  insurance company if they notice any red flags or
  other suspicious activities.
• The insurance company will determine if the
  activity must be reported to the authorities and
  will submit any required reports.

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Suspicious Activity Reports (SARs)

• Suspicious Activity Reports (SARs) and the fact
  that theyve been filed must be kept
  confidential.
• Customers cannot be notified that a suspicious
  activity has been reported.
• Insurance companies and agents are protected from
  liability to customers for disclosing possible
  criminal activity to law enforcement and certain
  government supervisory agencies.

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Office of Foreign Asset Control (OFAC)

• The OFAC section of the U.S. Department of the
  Treasury administers and enforces economic
  sanctions based on U.S. foreign policy and
  national security goals against targeted foreign
  countries, terrorists, international narcotics
  traffickers, and those engaged in activities
  related to the proliferation of weapons of mass
  destruction.
• OFAC imposes controls on certain transactions and
  may freeze or block foreign assets under U.S.
  jurisdiction.

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OFAC (continued)

• OFAC prohibits U.S. businesses from doing
  business in any way with targeted entities. If a
  U.S. business is doing business with a targeted
  entity, the asset must be blocked and reported to
  OFAC.
• OFAC has a web site that shows entities and
  individuals who have been identified as known or
  suspected terrorists, Specially Designated
  Nationals, or Blocked Persons.
• Insurance companies have procedures for checking
  customers against the list and submitting
  required reports if there is a match.

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Penalties

• The criminal statutes impose fines of up to 1
  million and imprisonment for up to 10 years for
  money laundering.
• Individuals whom the court finds to be willfully
  blind to money laundering activities may also be
  liable.

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Conclusion

• Insurance companies are required to have an AML
  program to help prevent and detect money
  laundering and are required to integrate their
  agents in the program.
• The regulations apply to individual permanent
  life insurance policies, individual annuity
  contracts, and any other insurance products with
  cash values.
• Agents must be alert to suspicious activities and
  report suspicious activities to the insurance
  company.

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Questions?

• For questions about the rules or assistance in
  developing policies and procedures to implement
  training requirements, please contact

• Your First Symetra Sales Representative or
• First Symetras Chief Compliance Officer
  (michele.kemper_at_symetra.com)

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First Symetra National Life InsuranceCompany of
New YorkNew York, NYThank You