AML Test Study Guide

Can customers sue an insurance company or an agent for disclosing their possible criminal activity? A) Certain states allow this B) Yes C) No

C) No

Do AML regulations apply to general agencies? A) Yes B) No C) Only if the agency is large

B) No

A customer deposited $50,000 in cash into his bank account during the same day from multiple branches. The bank must file the following: A) CTR B) SAR C) Both D) None of the above

C) Both

Insurance companies are required to file SAR with: A) FBI B) IRS C) FATF D) FinCEN

D) FinCEN

A customer deposited $11,000 in cash into his bank account. The bank must file the following: A) CTR B) SAR C) Both D) None of the above

A) CTR

Which of the following penalties can be imposed for each OFAC violation? A) Fine of up to $1M and/or up to 20 years in prison B) Fine of up to $500K and/or up to 10 years in prison C) Fine of up to $250K and/or up to 5 years in prison

A) Fine of up to $1M and/or up to 20 years in prison

Does the amount of penalties and the length of imprisonment for money laundering increases if a person also violated other US laws ? A) Yes B) No

A) Yes

Which of the following insurance products are not covered by AML regulations? A) an annuity contract other than a group annuities contract B) whole life insurance C) universal life insurance D) term life insurance

D) term life insurance

A financial institution can't delay reporting after the date of initial detection A) more than 90 calendar days B) more than 60 calendar days C) more than 30 calendar days

B) more than 60 calendar days

An insurance agency receives the payment from a customer in the amount of $10,500 in the form of money orders and traveler's checks. Does this transaction have to be reported to the IRS? A) Yes B) No

A) Yes

Can insurance carriers use their contractual relationships to require agents and brokers to provide them with information about the suspicious activity? A) Yes B) No

A) Yes

Which of the following statements is correct? A) AML regulations apply to all US-based insurers B) AML regulations apply only to insurers engaged within the US as a business in the issuing or underwriting of covered products.

B) AML regulations apply only to insurers engaged within the US as a business in the issuing or underwriting of covered products.

Are insurance agents contractually obligated to report suspicious activity? A) Only captive agents B) All insurance agents C) Only if the agency is large

B) All insurance agents

What kind of penalties can an insurance company face for not reporting suspicious activity related to money laundering? A) Criminal charges B) Civil charges

B) Civil charges

A customer bought ten whole life insurance policies and five annuity contracts over the past year using money orders and traveler's cheques. Which phases of money laundering this activity could represent? A) Placement B) Layering C) Integration D) None of the above

B) Layering

Which form do insurance companies use to file the SAR report? A) SAR-IC, form 108 B) SAR, form 111 C) SAR-SF, form 101 D) SAR-INS, form 101a

B) SAR, form 111

Why some insurers may keep SAR records for more than 5 years? A) Because the AML regulation may change in the future B) Because it doesn't cost much to keep SAR longer C) Because the insurer may still have financial relations with the customer but initial detection happened more than 5 years ago

C) Because the insurer may still have financial relations with the customer but initial detection happened more than 5 years ago

Do insurance carriers require that only captive agents complete the AML training or it applies to the independent agents as well? A) Only captive agents B) Only independent agents C) Both captive and independent agents

C) Both captive and independent agents

Which organization published the rules obligating insurance carriers to create AML programs? A) FINRA B) LIMRA C) FinCEN D) FATF

C) FinCEN

Which of the following statements are correct? A) Independent insurance agents are required to file SARs B) Insurance agents are required to file SARs if they work for an agency C) Insurance agents are expected to work with carriers in identifying suspicious transactions that the carrier must report D) If an agent suspects there is a potential for money laundering they should immediately contact the carrier's AML compliance officer and await instructions.

C) Insurance agents are expected to work with carriers in identifying suspicious transactions that the carrier must report D) If an agent suspects there is a potential for money laundering they should immediately contact the carrier's AML compliance officer and await instructions.

A money launderer decides to borrow the money against the whole life insurance policy purchased with illicit funds. This is an illustration of which money laundering phase? A) Placement B) Layering C) Integration D) None of the above

C) Integration

Which of the following statements is not correct? A) Money laundering is used to hide the origin of funds. B) A large portion of funds used in terrorist financing comes from money laundering. C) Insurance companies must monitor transactions for suspicious activity possibly related to money laundering. D) Insurance agencies must monitor transactions for suspicious activity possibly related to terrorist financing.

D) Insurance agencies must monitor transactions for suspicious activity possibly related to terrorist financing.