The Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, and the California Insurance Department (the “Department”) announced that they signed a Memorandum of Understanding (“MOU”) that will allow the FinCEN and the Department to share important information enabling both parties to coordinate and heighten efforts aimed at rooting out fraud and protect consumers and the insurance industry from criminal acts.
The MOU is part of FinCEN’s effort to ensure broader compliance with federal anti-money laundering regulations. Under the MOU, the collective goal between FinCEN and the Department is to enhance communication and coordination between both entities to better identify, deter and interdict illicit activities, including money laundering, fraud and other financial crimes.
FinCEN's insurance-related focus is in on money laundering through the sale of covered products by insurance companies. Covered products mean: (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. Under the MOU, FinCEN will share information it gathers regarding covered products with the Department.
Individual agreements with state insurance regulators are necessary because each state has slightly different statutory requirements governing the sharing of insurance industry information. For example, FinCEN has also recently signed an agreement similar to the MOU with the Louisiana Department of Insurance. Media sources report that FinCEN plans to enter into similar agreements with each state’s insurance regulator.