Review AML

The Bank Secrecy Act prevents money laundering by

*• C) imposing strict reporting and recordkeeping requirements on financial institutions

Money laundering is estimated to amount to how much of the world's gross domestic product?

C) 2 and 5%

Under the Patriot Act, insurance companies are required to implement all of the following EXCEPT a(n)

D) ethical practices surveillance program

All of the following are descriptive of the anti-money laundering program required by the regulation except

One size fits all

Which of the following is not a step in the money laundering process

Saving

The purpose of which of the following components of the AML program is to help employees recognize high risk accounts and suspicious activity

Training program

Before his client was exposed as part of a terrorist network, Brad's client came in to request a withdrawal. The client did not want to close the policy. He just wanted to take most of the money out of it. Brad informed the client that there would be some significant penalties, The client was unmoved by this and indicated that there was a business opportunity that he just could not pass up. This would be identified as which step in the money laundering process?

V• B) Integration

All of the following are essential elements of an insurance company's anti-money laundering program EXCEPT

V• C) a quality improvement program

Which of the following sets the framework for universal AML efforts?

A) FATF's 40 Recommendations

Question Carol works in the insurance industry. Carol is subject to the training and additional provisions of the USA PATRIOT Act and AML training due to the nature of the relationship she has with her company. Carol is most likely which of the following?

C) Broker

Which of the following organizations represents insurance regulatory authorities and promotes cooperation among insurance regulators and sets international standards for insurance supervision?

C) The International Association of Insurance Supervisors

Which of the following components of an AML program is intended to test the effectiveness of the program?

D) Audit

Which of the following forms does a US citizen have to file for having a foreign bank account with a balance of $10,000 or more

FBAr

Mixing elicit and legal funds to purchase a new car is an example of

Integration

The insurance industry is most vulnerable to money laundering during which of the following faces of the money laundering process?

Integration and layering

Before his clients Wes is about as part of a terrorist network Brad was several months into the Seo when he noticed that his client was coming in about once every two weeks and making a premium deposit. He also requested a 1035 exchange and transfer funds from another policy into the policy Brad set up for him. This would be out and if I ask which step in the money laundering process

Layering

ed sells insurance for a large brokerage firm. As a result of his sales activities, he is required to attend training on money laundering. Ed is most likely selling which of the following ?

Life insurance and annuities

All of the following are red flags that would prompt consideration of filing a suspicious activity report EXCEPT a

O A) prospect requests a consultation to consider purchasing an immediate annuity

An insurance company files a suspicious activity report on June 1, 2005. On which of the following dates can the insurer cease maintaining a copy of the report?

O C) June 2, 2010

Brad is an agent working with a large general agency. He has just saw a very large life insurance policy to a client who is later discovered to be part of a terrorist network. And restaurant back to the same of this life policy could be viewed as which of the following

Placement

Purchasing an annuity with money from criminal activity is an example of

Placement

Which of the following is an international body house but whose purpose is to develop and promote policies to compact money laundering and terrorist financing is why

The financial action task force

Question ID: 542994 The AML regulations provide protection from liability for the filing of suspicious transactions and for not disclosing such a filing.

True

The first known case of money laundering in the insurance industry was reported in

V O C) 2002

Joe is selling mutual funds and variable life and annuity contracts. Joe has a Series 6 and 63 license. As a result, Joe would be subject to which of the following under the PATRIOT Act, BSA, and AML provisions?

VO C) Joe would be exempt due to the governing rules in place under the provisions for the SEC and the regulatory issues he is already subject to regarding money laundering.

Which of the following is NOT a function of the Financial Action Task Force?

VO D) Administer the Bank Secrecy Act

Which of the following organizations is a bureau of the Treasury Department that provides US policymakers with strategic analyses of domestic and worldwide money laundering developments, trends, and patterns?

XO B) OFAC

The insurance industry is susceptible to money laundering for all of the following reasons EXCEPT

anti-money laundering regulations are too vague

A list of known or suspected terrorist organizations is maintained by

vO C) OFAC

All of the following are descriptive of an AML program compliance officer EXCEPT

1 O D) graduate of FinCEN's AML Compliance Officer Program

Jon just sold a life insurance policy to a client who bought a single premium whole life contract. The initial premium was $12,750, and the client paid Jon in cash. Under the provisions of the PATRIOT Act, Jon will most likely have to do which of the following?

*O B) File an IRS Form 8300 for a cash transaction in excess of $10,000

Which of the following insurance policies presents the greatest risk of money laundering?

Life insurance policy

An insurance company's customer identification program must include all of the following EXCEPT

V O C) FATF certification

Which of the following acts requires regulators to enhance examination procedures and upgrade examiner training to improve the identification of money laundering schemes in financial institutions?

X O A) Employee Retirement and Income Security

Question #57 of 60 Which of the following sequences describes the money laundering process?

VO C) Placement, layering, integration

Question #18 of 60 Arlene sold a life insurance policy to her client, and the client paid Arlene $6,000 for the premium on the policy in two installments over the course of two days: $4,000 on the date of the application and then $2,000 a day later. Arlene now needs to do which of the following?

*O B) Arlene and her company are going to have to file a suspicious activity report under Section 103.16(b) rules of the Secrecy Act.

An insurance company's customer identification program must include all of the following EXCEPT

*• D) FATF certification

Depositing illicit monies in a financial institution is an example of .

.• A) placement

All of the following are key requirements for the internal compliance officer position EXCEPT A) state licensure

A) state licensure

Which of the following best describes the money laundering process?

D) Converting money illegally obtained into seemingly legitimate resources

Which of the following is the international standard for combating money laundering activities?

D) The 40 Recommendations

The first step an insurance company should take in establishing an anti-money laundering program is to

D) conduct a risk assessment

All of the following statements about an insurance company's AML training program are correct EXCEPT the training program

A) must include a segment on FATF

All of the following statements about suspicious activity reports are correct EXCEPT

A) insurance companies must file suspicious activity reports with 25 calendar days of becoming aware of a suspicious transaction

The most dangerous step in the money laundering process is

VO B) placement

Combating money laundering became a compelling priority for financial institutions on

1 O C) October 26, 2001

All of the following statements about an insurance company's anti-money laundering program are correct EXCEPT the program mus

A) comply with NAIC's model regulation for anti-money laundering programs

Wallace has a client who is cancelling an annuity contract that has been in force for about 10 months. The contract is fairly large and Wallace has explained to the annuity owner that she will incur some hefty surrender charges as a result of this surrender. The client is seemingly unmoved and wishes to move forward with this transaction. This should lead Wallace to

A) file a suspicious activity report based on the client's apparent disregard for the loss she is taking from the early surrender

Alicia just sold a life contract and the client paid cash for the policy. However, this client was adamant that the amount paid be $9,900. Alicia should do which of the following?

D) She should file a voluntary IRS Form 8300. Even though the amount is below the trigger amount, it is still suspect due to the client's behavior and the unusual nature of his pointed request.

When a financial institution finds out one of its customers is listed on the Lists of Known or Suspected Terrorists, it must

D) freeze the customer's assets and block transactions with the customer

Which of the following is an office within Treasury's Office of Enforcement that administers and enforces US sanction policies against targeted foreign counties, individuals, and organizations that sponsor terrorism and international narcotics traffickers?

Help New O C) OFAC

Which of the following acts made money laundering a crime? VO A) The Money Laundering and Control Act

VO A) The Money Laundering and Control Act

All of the following statements about suspicious activity reports are correct EXCEPT

VO A) an insurer must notify the individual involved with the transaction that his activities have been reported

Question How much must an insurer receive in cash in one transaction or in two or more related transactions to trigger the submission of a currency transaction report?

VO B) $10,000

The Bank Secrecy Act is administered by

VO B) The Financial Crimes Enforcement Network

The Financial Crimes Enforcement Network is a bureau in the US Department of

VO B) the Treasury

Using multiple complex financial transactions to obscure the source of illegal funds is called

VO D) layering