PART 1025—RULES FOR INSURANCE COMPANIES Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307; sec. 701, Pub. L. 114-74, 129 Stat. 599. Source: 75 FR 65812, Oct. 26, 2010, unless otherwise noted. Subpart A—Definitions § 1025.100 Definitions. Refer to § 1010.100 of this chapter for general definitions not noted herein. To the extent there is a differing definition in § 1010.100 of this chapter, the definition in this section is what applies to part 1025. Unless otherwise indicated, for purposes of this part: (a) Annuity contract (b) Covered product (1) A permanent life insurance policy, other than a group life insurance policy; (2) An annuity contract, other than a group annuity contract; or (3) Any other insurance product with features of cash value or investment. (c) Group annuity contract (d) Group life insurance policy (e) Insurance agent (f) Insurance broker (g) Insurance company or insurer. (2) The term “insurance company” or “insurer” does not include an insurance agent or insurance broker. (h) Permanent life insurance policy Subpart B—Programs § 1025.200 General. Insurance companies are subject to the program requirements set forth and cross referenced in this subpart. Insurance companies should also refer to subpart B of part 1010 of this chapter for program requirements contained in that subpart which apply to insurance companies. § 1025.210 Anti-money laundering programs for insurance companies. (a) In general. (b) Minimum requirements. (1) Incorporate policies, procedures, and internal controls based upon the insurance company's assessment of the money laundering and terrorist financing risks associated with its covered products. Policies, procedures, and internal controls developed and implemented by an insurance company under this section shall include provisions for complying with the applicable requirements of subchapter II of chapter 53 of title 31, United States Code and this chapter, integrating the company's insurance agents and insurance brokers into its anti-money laundering program, and obtaining all relevant customer-related information necessary for an effective anti-money laundering program. (2) Designate a compliance officer who will be responsible for ensuring that: (i) The anti-money laundering program is implemented effectively, including monitoring compliance by the company's insurance agents and insurance brokers with their obligations under the program; (ii) The anti-money laundering program is updated as necessary; and (iii) Appropriate persons are educated and trained in accordance with paragraph (b)(3) of this section. (3) Provide for on-going training of appropriate persons concerning their responsibilities under the program. An insurance company may satisfy this requirement with respect to its employees, insurance agents, and insurance brokers by directly training such persons or verifying that persons have received training by another insurance company or by a competent third party with respect to the covered products offered by the insurance company. (4) Provide for independent testing to monitor and maintain an adequate program, including testing to determine compliance of the company's insurance agents and insurance brokers with their obligations under the program. The scope and frequency of the testing shall be commensurate with the risks posed by the insurance company's covered products. Such testing may be conducted by a third party or by any officer or employee of the insurance company, other than the person designated in paragraph (b)(2) of this section. (c) Anti-money laundering program requirements for insurance companies registered or required to register with the Securities and Exchange Commission as broker-dealers in securities. (d) Compliance. Subpart C—Reports Required To Be Made By Insurance Companies § 1025.300 General. Insurance companies are subject to the reporting requirements set forth and cross referenced in this subpart. Insurance companies should also refer to subpart C of part 1010 of this chapter for reporting requirements contained in that subpart which apply to insurance companies. §§ 1025.310-1025.315 [Reserved] § 1025.320 Reports by insurance companies of suspicious transactions. (a) General. (2) A transaction requires reporting under this section if it is conducted or attempted by, at, or through an insurance company, and involves or aggregates at least $5,000 in funds or other assets, and the insurance company knows, suspects, or has reason to suspect that the transaction (or a pattern of transactions of which the transaction is a part): (i) Involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any Federal law or regulation or to avoid any transaction reporting requirement under Federal law or regulation; (ii) Is designed, whether through structuring or other means, to evade any requirements of this chapter or of any other regulations promulgated under the Bank Secrecy Act; (iii) Has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the insurance company knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction; or (iv) Involves use of the insurance company to facilitate criminal activity. (3)(i) An insurance company is responsible for reporting suspicious transactions conducted through its insurance agents and insurance brokers. Accordingly, an insurance company shall establish and implement policies and procedures reasonably designed to obtain customer-related information necessary to detect suspicious activity from all relevant sources, including from its insurance agents and insurance brokers, and shall report suspicious activity based on such information. (ii) Certain insurance agents may have a separate obligation to report suspicious activity pursuant to other provisions of this chapter. In those instances, no more than one report is required to be filed by the financial institutions involved in the transaction, as long as the report filed contains all relevant facts, including the names of both institutions and the words “joint filing” in the narrative section, and both institutions maintain a copy of the report filed, along with any supporting documentation. (iii) An insurance company that issues variable insurance products funded by separate accounts that meet the definition of a mutual fund in § 1024.320(a)(1) of this chapter shall file reports of suspicious transactions pursuant to § 1024.320 of this chapter. (b) Filing procedures What to file. (2) Where to file. (3) When to file. (c) Exception. (d) Retention of records. (e) Confidentiality of SARs. (1) Prohibition on disclosures by insurance companies General rule. (ii) Rules of Construction. (A) The disclosure by an insurance company, or any director, officer, employee, or agent of an insurance company, of: ( 1 ( 2 (B) The sharing by an insurance company, or any director, officer, employee, or agent of the insurance company, of a SAR, or any information that would reveal the existence of a SAR, within the insurance company's corporate organizational structure for purposes consistent with Title II of the Bank Secrecy Act as determined by regulation or in guidance. (2) Prohibition on disclosures by government authorities. (f) Limitation on liability. (g) Compliance. (h) Suspicious transaction reporting requirements for insurance companies registered or required to register with the Securities and Exchange Commission as broker-dealers in securities. (i) Applicability date. [75 FR 65812, Oct. 26, 2010, as amended at 75 FR 10520, Feb. 25, 2011; 81 FR 76865, Nov. 4, 2016] § 1025.330 Reports relating to currency in excess of $10,000 received in a trade or business. Refer to § 1010.330 of this chapter for rules regarding the filing of reports relating to currency in excess of $10,000 received by insurance companies. Subpart D—Records Required To Be Maintained By Insurance Companies § 1025.400 General. Insurance companies are subject to the recordkeeping requirements set forth and cross referenced in this subpart. Insurance companies should also refer to subpart D of part 1010 of this chapter for recordkeeping requirements contained in that subpart which apply to insurance companies. § 1025.410 Recordkeeping. Refer to § 1010.410. Subpart E—Special Information Sharing Procedures To Deter Money Laundering and Terrorist Activity § 1025.500 General. Insurance companies are subject to the special information sharing procedures to deter money laundering and terrorist activity requirements set forth and cross referenced in this subpart. Insurance companies should also refer to subpart E of part 1010 of this chapter for special information sharing procedures to deter money laundering and terrorist activity contained in that subpart which apply to insurance companies. § 1025.520 Special information sharing procedures to deter money laundering and terrorist activity for insurance companies. (a) Refer to § 1010.520 of this chapter. (b) [Reserved] § 1025.530 [Reserved] § 1025.540 Voluntary information sharing among financial institutions. (a) Refer to § 1010.540 of this chapter. (b) [Reserved] Subpart F—Special Standards of Diligence; Prohibitions; and Special Measures for Insurance Companies §§ 1025.600-1025.670 [Reserved]