(a) General.
(1) Each insurance company shall file with
the Financial Crimes Enforcement Network, to the extent and in the
manner required by this section, a report of any suspicious transaction
involving a covered product that is relevant to a possible violation
of law or regulation. An insurance company may also file with the
Financial Crimes Enforcement Network by using the form specified in
paragraph (b)(1) of this section or otherwise, a report of any suspicious
transaction that it believes is relevant to the possible violation
of any law or regulation but the reporting of which is not required
by this section.
(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 section 1024.320(a)(1)
of this chapter shall file reports of suspicious transactions pursuant
to section 1024.320 of this chapter.
(b) Filing procedures.
(1) What to file. A suspicious transaction shall be reported by
completing a Suspicious Activity Report (SAR), and collecting and
maintaining supporting documentation as required by paragraph (d)
of this section.
(2) Where to file. The SAR shall be filed with
the Financial Crimes Enforcement Network as indicated in the instructions
to the SAR.
(3) When to file. A SAR shall be filed no later
than 30 calendar days after the date of the initial detection by the
insurance company of facts that may constitute a basis for filing
a SAR under this section. If no suspect is identified on the date
of such initial detection, an insurance company may delay filing a
SAR for an additional 30 calendar days to identify a suspect, but
in no case shall reporting be delayed more than 60 calendar days after
the date of such initial detection. In situations that require immediate
attention, such as terrorist financing or ongoing money laundering
schemes, the insurance company shall immediately notify by telephone
an appropriate law enforcement authority in addition to filing timely
a SAR. Insurance companies wishing voluntarily to report suspicious
transactions that may relate to terrorist activity may call the Financial
Crimes Enforcement Network’s Financial Institutions Hotline at 1-866-556-3974
in addition to filing timely a SAR if required by this section.
(c) Exception. An insurance company is not required to file a SAR
to report the submission to it of false or fraudulent information
to obtain a policy or make a claim, unless the company has reason
to believe that the false or fraudulent submission relates to money
laundering or terrorist financing.
(d) Retention of records. An insurance company
shall maintain a copy of any SAR filed and the original or business
record equivalent of any supporting documentation for a period of
five years from the date of filing the SAR. Supporting documentation
shall be identified as such and maintained by the insurance company
and shall be deemed to have been filed with the SAR. When an insurance
company has filed or is identified as a filer in a joint Suspicious
Activity Report, the insurance company shall maintain a copy of such
joint report (together with copies of any supporting documentation)
for a period of five years from the date of filing. An insurance company
shall make all supporting documentation available to FinCEN or any
Federal, State, or local law enforcement agency, or any Federal regulatory
authority that examines the insurance company for compliance with
the Bank Secrecy Act, or any State regulatory authority administering
a State law that requires the insurance company to comply with the
Bank Secrecy Act or otherwise authorizes the State authority to ensure
that the institution complies with the Bank Secrecy Act, upon request.
(e) Confidentiality of
SARs. A SAR, and any information that would reveal the existence
of a SAR, are confidential and shall not be disclosed except as authorized
in this paragraph (e). For purposes of this paragraph (e) only, a
SAR shall include any suspicious activity report filed with FinCEN
pursuant to any regulation in this chapter.
(1) Prohibition
on disclosures by insurance companies.
(i) General rule. No insurance company, and
no director, officer, employee, or agent of any insurance company,
shall disclose a SAR or any information that would reveal the existence
of a SAR. Any insurance company, and any director, officer, employee,
or agent of any insurance company that is subpoenaed or otherwise
requested to disclose a SAR or any information that would reveal the
existence of a SAR, shall decline to produce the SAR or such information,
citing this section and 31 U.S.C. 5318(g)(2)(A)(i), and shall notify
FinCEN of any such request and the response thereto.
(ii) Rules
of construction. Provided that no person involved in any reported
suspicious transaction is notified that the transaction has been reported,
this paragraph (e)(1) shall not be construed as prohibiting:
(A) The disclosure
by an insurance company, or any director, officer, employee, or agent
of an insurance company, of:
(1) A SAR, or any information that would reveal the existence
of a SAR, to FinCEN or any Federal, State, or local law enforcement
agency, or any Federal regulatory authority that examines the insurance
company for compliance with the Bank Secrecy Act, or any State regulatory
authority administering a State law that requires the insurance company
to comply with the Bank Secrecy Act or otherwise authorizes the State
authority to ensure that the institution complies with the Bank Secrecy
Act; or
(2) The
underlying facts, transactions, and documents upon which a SAR is
based, including but not limited to, disclosures to another financial
institution, or any director, officer, employee, or agent of a financial
institution, for the preparation of a joint SAR.
(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. A Federal, State, local, territorial, or Tribal government authority,
or any director, officer, employee, or agent of any of the foregoing,
shall not disclose a SAR, or any information that would reveal the
existence of a SAR, except as necessary to fulfill official duties
consistent with title II of the Bank Secrecy Act. For purposes of
this section, “official duties” shall not include the disclosure of
a SAR, or any information that would reveal the existence of a SAR,
in response to a request for disclosure of non-public information
or a request for use in a private legal proceeding, including a request
pursuant to 31 CFR 1.11.
(f) Limitation on liability. An insurance company,
and any director, officer, employee, or agent of any insurance company,
that makes a voluntary disclosure of any possible violation of law
or regulation to a government agency or makes a disclosure pursuant
to this section or any other authority, including a disclosure made
jointly with another institution, shall be protected from liability
to any person for any such disclosure, or for failure to provide notice
of such disclosure to any person identified in the disclosure, or
both, to the full extent provided by 31 U.S.C. 5318(g)(3).
(g) Compliance. Insurance
companies shall be examined by FinCEN or its delegatees for compliance
with this section. Failure to satisfy the requirements of this section
may be a violation of the Bank Secrecy Act and of this chapter.
(h) Suspicious transaction
reporting requirements for insurance companies registered or required
to register with the Securities and Exchange Commission as broker-dealers
in securities. An insurance company that is registered or required
to register with the Securities and Exchange Commission as a broker-dealer
in securities shall be deemed to have satisfied the requirements of
this section for its broker-dealer activities to the extent that the
company complies with the reporting requirements applicable to such
activities pursuant to section 1023.320 of this chapter.
(i) Applicability date. This section applies to transactions occurring after May 2, 2006.
