Insurance Europe has called on European regulators to reassess parts of the proposed anti-money laundering (AML) rules, cautioning that several elements under consultation could create unnecessary operational burdens, particularly for life insurance providers dealing with low-risk products.
The federation submitted its position to the European Banking Authority (EBA) as part of the consultation on new Regulatory Technical Standards (RTS), which are being developed in line with the EU’s sixth Anti-Money Laundering Directive (AMLD6).
The proposals seek to standardise how financial entities assess and report on money laundering and terrorist financing risks.
While the insurance industry expressed support for a harmonised and data-based approach, it flagged that the reporting and data collection requirements outlined in the draft could result in disproportionate demands for insurers.
Insurers already perform risk assessments under existing rules, and further data requirements - especially for low-risk life insurance products like pension schemes and pure risk policies - were described as unlikely to add supervisory value.
The industry group proposed that any new data collection be built on current practices and that institutions be given a transition period to adjust internal systems before implementation.
It also recommended revising the data fields to be collected, particularly those not typically maintained in the insurance sector, such as the customer’s city of birth or multiple nationalities.
These requirements, it noted, are often absent from commonly used identity documents and may be difficult for customers to supply.
Remote customer identification methods, which vary across EU member states, should continue to be accepted, according to the federation.
It warned against overdependence on electronic identification systems compliant with the eIDAS regulation, arguing that insurers should retain the ability to use established alternative processes, particularly in low-risk situations.
For simplified due diligence (SDD), Insurance Europe suggested that updates to customer data should be triggered by specific events, such as benefit payout or contract changes, rather than scheduled periodically.
It also recommended that products with long durations and low AML risk be explicitly covered by sector-specific simplified measures. These include personal and occupational pension schemes, pure risk policies, and paid-up contracts with no ongoing premium payments.
The federation questioned certain verification steps under the enhanced due diligence provisions, including the need to assess reputational factors or past business activity of beneficial owners, saying these go beyond existing legal requirements and could prove impractical.
Insurance Europe said it remains open to further engagement with EU institutions as the regulatory process continues.
Are the current proposals fit for purpose across all financial sectors, or should AML rules consider product-specific risks more closely? Share your views in the comments.
