AMLS REVIEW TEST 2
1. Question Carol works in the insurance industry. Carol is subject to the training and additional
provisions of the USA PATRIOT Act and AML trainingdue to the nature of the relationship she has
with her company. Carol is most likely which of the following?
Answer: C) Broker
2. All of the following statements about an insurance company's anti-moneylaundering program
are correct EXCEPT the program mus
Answer: A) comply with NAIC's model regulation for anti-money launderingprograms
3. The Financial Crimes Enforcement Network is a bureau in the US Depart-ment of
Answer: VO B) the Treasury
4. All of the following are red flags that would prompt consideration of filingasuspicious activity
report EXCEPT a
Answer: O A) prospect requests a consultation to consider purchasing animmediate annuity
5. Money laundering is estimated to amount to how much of the world'sgross domestic
product?
Answer: C) 2 and 5%
6. Which of the following is an office within Treasury's Office of Enforce-ment that
administers and enforces US sanction policies against targeted foreign counties, individuals, and
organizations that sponsor terrorism and international narcotics traffickers?
Answer: Help New O C) OFAC
7. The most dangerous step in the money laundering process is
Answer: VO B)placement
8. Which of the following organizations is a bureau of the Treasury Depart-ment that provides
US policymakers with strategic analyses of domestic andworldwide money laundering
developments, trends, and patterns?
Answer: XO B) OFAC
9. 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?
Answer: O C) June 2, 2010
, 10. All of the following statements about an insurance company's AML train-ing program are
correct EXCEPT the training program
Answer: A) must include a segment on FATF
11. Combating money laundering became a compelling priority for financial institutions on
Answer: 1 O C) October 26, 2001
12. Which of the following organizations represents insurance regulatory authorities and
promotes cooperation among insurance regulators and sets international standards for
insurance supervision?
Answer: C) The International As- sociation of Insurance Supervisors
13. Using multiple complex financial transactions to obscure the source of illegal funds is
called
Answer: VO D) layering
14. The first step an insurance company should take in establishing ananti- money laundering
program is to
Answer: D) conduct a risk assessment
15. All of the following are key requirements for the internal complianceofficer position
EXCEPT A) state licensure
Answer: A) state licensure
16. 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 clientpaid Jon in cash. Under the provisions of
the PATRIOT Act, Jon will most likely have to do which of the following?
Answer: *O B) File an IRS Form 8300 for a cash transaction in excess of
$10,000
17. Which of the following acts made money laundering a crime? VO A) TheMoney Laundering
and Control Act
Answer: VO A) The Money Laundering and ControlAct
18. All of the following are essential elements of an insurance company's anti-money laundering
program EXCEPT
Answer: V• C) a quality improvement program
19. The first known case of money laundering in the insurance industry wasreported in
Answer: V O C) 2002
1. Question Carol works in the insurance industry. Carol is subject to the training and additional
provisions of the USA PATRIOT Act and AML trainingdue to the nature of the relationship she has
with her company. Carol is most likely which of the following?
Answer: C) Broker
2. All of the following statements about an insurance company's anti-moneylaundering program
are correct EXCEPT the program mus
Answer: A) comply with NAIC's model regulation for anti-money launderingprograms
3. The Financial Crimes Enforcement Network is a bureau in the US Depart-ment of
Answer: VO B) the Treasury
4. All of the following are red flags that would prompt consideration of filingasuspicious activity
report EXCEPT a
Answer: O A) prospect requests a consultation to consider purchasing animmediate annuity
5. Money laundering is estimated to amount to how much of the world'sgross domestic
product?
Answer: C) 2 and 5%
6. Which of the following is an office within Treasury's Office of Enforce-ment that
administers and enforces US sanction policies against targeted foreign counties, individuals, and
organizations that sponsor terrorism and international narcotics traffickers?
Answer: Help New O C) OFAC
7. The most dangerous step in the money laundering process is
Answer: VO B)placement
8. Which of the following organizations is a bureau of the Treasury Depart-ment that provides
US policymakers with strategic analyses of domestic andworldwide money laundering
developments, trends, and patterns?
Answer: XO B) OFAC
9. 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?
Answer: O C) June 2, 2010
, 10. All of the following statements about an insurance company's AML train-ing program are
correct EXCEPT the training program
Answer: A) must include a segment on FATF
11. Combating money laundering became a compelling priority for financial institutions on
Answer: 1 O C) October 26, 2001
12. Which of the following organizations represents insurance regulatory authorities and
promotes cooperation among insurance regulators and sets international standards for
insurance supervision?
Answer: C) The International As- sociation of Insurance Supervisors
13. Using multiple complex financial transactions to obscure the source of illegal funds is
called
Answer: VO D) layering
14. The first step an insurance company should take in establishing ananti- money laundering
program is to
Answer: D) conduct a risk assessment
15. All of the following are key requirements for the internal complianceofficer position
EXCEPT A) state licensure
Answer: A) state licensure
16. 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 clientpaid Jon in cash. Under the provisions of
the PATRIOT Act, Jon will most likely have to do which of the following?
Answer: *O B) File an IRS Form 8300 for a cash transaction in excess of
$10,000
17. Which of the following acts made money laundering a crime? VO A) TheMoney Laundering
and Control Act
Answer: VO A) The Money Laundering and ControlAct
18. All of the following are essential elements of an insurance company's anti-money laundering
program EXCEPT
Answer: V• C) a quality improvement program
19. The first known case of money laundering in the insurance industry wasreported in
Answer: V O C) 2002
