Anti-money laundering rules should not be applied to general insurance, according to the Global Federation of Insurance Associations (GFIA). It believes that general insurance poses almost non-existent risk of money laundering or the financing of terrorism.
The GFIA published a position paper Thursday arguing that policymakers should follow the risk-based approach promoted by the Financial Action Task Force when developing any new anti-money laundering (AML) rules and rules combating the financing of terrorism (CFT).
The organisation said that any new rules combating money laundering (ML) or terrorism financing (TF) should only cover life insurance, which has some exposure to ML/TF risks, although the GFIA said that exposure was quite low.
“However, GFIA is concerned that some stakeholders are still pushing for AML/CFT rules to also be applied to general insurance, despite its close to non-existent exposure to ML/TF risks,” the federation said. “Furthermore, applying AML/CTF rules to general insurance would divert much needed resources and attention from other much higher risk areas.”