AML Updated 2023-2024 Questions and Answers
100% Verified
1. Which of the following statements best describes the money laundering process? - ANSWER-
Illegal money is converted to seemingly legal money.
2. Which stage of the money laundering process involves carrying out a series of financial
transactions to hide the illicit source of the funds? - ANSWER- Layering
3. Depositing illicit money in a financial institution is an example of - ANSWER- Placement
4. Integration occurs when - ANSWER- illegal money is mixed with legitimate business earnings
5. Which of the following is the international standard for combating money laundering activities? -
ANSWER- The FATF's Forty Recommendations
6. Which of the following is NOT a basic requirement for anti-money laundering programs? -
ANSWER- Compliance with FATF's Nine Special Recommendations on Terrorist Financing
7. Basic requirements of anti-money laundering programs include: - ANSWER- development of
policies, procedures, and internal controls designed to detect and prevent money laundering;
designation of an executive-level internal compliance officer; creation of an employee training
program; and development of an independent audit function.
8. A suspicious activity report (SAR) must be filed on any transaction that involves at least how
much in funds or other assets? - ANSWER- $5,000
9. A Currency Transaction Report (CTR) - ANSWER- is generally required when an insurer receives
more than $10,000 in cash in one transaction or in two or more related transactions.
, 10. Why are agents and brokers not individually or independently required to create their own anti-
money laundering programs? - ANSWER- Insurers are in the best position to maintain AML
programs.
11. AML programs must focus on covered insurance products because - ANSWER- they are likely to
present a higher degree of risk for money laundering.
12. Which of the following is NOT a core component of the AML program requirement? - ANSWER-
Membership in the FATF.
13. three items are identified as core components of the AML program requirement. - ANSWER- the
program must be in writing, approved by senior management, and made available to the US
Treasury Department upon request.
14. Who determines which methods of payment are acceptable for the purchase of insurance
policies? - ANSWER- Insurance company issuing the policy
15. Why is it necessary to monitor wire transfers from one country to another country? - ANSWER-
The transfer ensures that the insurance company does not accept or send funds to an OFAC-
blocked party.
16. Which of the following is NOT a reason why a financial institution would have a know your
customer program? - ANSWER- To determine whether or not its program meets the
requirements of the Bank Secrecy Act.
17. Agents should collect all of the following types of information about a potential client EXCEPT -
ANSWER- personal and professional references
18. an agent should collect the following information: - ANSWER- mailing address (if different from
home address); Social Security number or tax identification number; previous experience with
owned financial products; financial objective in purchasing product; net worth, liquid net worth,
and annual income; and citizenship status, date and place of birth, full name (first, middle initial,
last)
19. and home address (not just a post office box).
100% Verified
1. Which of the following statements best describes the money laundering process? - ANSWER-
Illegal money is converted to seemingly legal money.
2. Which stage of the money laundering process involves carrying out a series of financial
transactions to hide the illicit source of the funds? - ANSWER- Layering
3. Depositing illicit money in a financial institution is an example of - ANSWER- Placement
4. Integration occurs when - ANSWER- illegal money is mixed with legitimate business earnings
5. Which of the following is the international standard for combating money laundering activities? -
ANSWER- The FATF's Forty Recommendations
6. Which of the following is NOT a basic requirement for anti-money laundering programs? -
ANSWER- Compliance with FATF's Nine Special Recommendations on Terrorist Financing
7. Basic requirements of anti-money laundering programs include: - ANSWER- development of
policies, procedures, and internal controls designed to detect and prevent money laundering;
designation of an executive-level internal compliance officer; creation of an employee training
program; and development of an independent audit function.
8. A suspicious activity report (SAR) must be filed on any transaction that involves at least how
much in funds or other assets? - ANSWER- $5,000
9. A Currency Transaction Report (CTR) - ANSWER- is generally required when an insurer receives
more than $10,000 in cash in one transaction or in two or more related transactions.
, 10. Why are agents and brokers not individually or independently required to create their own anti-
money laundering programs? - ANSWER- Insurers are in the best position to maintain AML
programs.
11. AML programs must focus on covered insurance products because - ANSWER- they are likely to
present a higher degree of risk for money laundering.
12. Which of the following is NOT a core component of the AML program requirement? - ANSWER-
Membership in the FATF.
13. three items are identified as core components of the AML program requirement. - ANSWER- the
program must be in writing, approved by senior management, and made available to the US
Treasury Department upon request.
14. Who determines which methods of payment are acceptable for the purchase of insurance
policies? - ANSWER- Insurance company issuing the policy
15. Why is it necessary to monitor wire transfers from one country to another country? - ANSWER-
The transfer ensures that the insurance company does not accept or send funds to an OFAC-
blocked party.
16. Which of the following is NOT a reason why a financial institution would have a know your
customer program? - ANSWER- To determine whether or not its program meets the
requirements of the Bank Secrecy Act.
17. Agents should collect all of the following types of information about a potential client EXCEPT -
ANSWER- personal and professional references
18. an agent should collect the following information: - ANSWER- mailing address (if different from
home address); Social Security number or tax identification number; previous experience with
owned financial products; financial objective in purchasing product; net worth, liquid net worth,
and annual income; and citizenship status, date and place of birth, full name (first, middle initial,
last)
19. and home address (not just a post office box).
