AML Exam Anti-Money Laundering
WebCE – questions and answers
During which stage of the money laundering process are laundered or cleansed
funds circulated back into the hands of the criminal and ultimately into the financial
system?
a. closet
b. placement
c. layering
d. integration - .......ANSWERS 🔷🖊✔✔d. integration
That's correct! The final stage in the money laundering process is called integration.
Here, the cleansed money is circulated back into the hands of the criminal and
ultimately into the financial system.
Insurance companies are not required to establish anti-money laundering programs,
though they are encouraged to do so.
a. True
b. False - .......ANSWERS 🔷🖊✔✔b. False
That's correct! Title III of the PATRIOT Act specifically addresses money laundering
and expands the Bank Secrecy Act to encompass all financial institutions, including
life insurance companies. The Act's inclusion of insurance companies recognized the
simple fact that some insurance products were being used in money laundering
schemes.
A customer has purchased over a dozen life insurance and annuity contracts over
the past year, using cashier's checks to pay the premiums. If this action is part of a
money laundering operation, which stage does it represent?
a. acquisition
b. placement
c. layering
, d. integration - .......ANSWERS 🔷🖊✔✔c. layering
That's correct! Money laundering is a process that moves illegal money through
three stages on its way to apparent legitimacy: placement, layering, and
integration. The second stage, layering, is achieved by using cash or cash
equivalents to purchase multiple financial instruments that can subsequently be
converted into clean money.
All of the following are federal laws or related rulings that have a direct impact on
anti-money laundering requirements EXCEPT:
a. the Bank Secrecy Act of 1970
b. the Fair Credit Reporting Act of 1972
c. the USA PATRIOT Act of 2001
d. the FinCEN final rules published November 2005 - .......ANSWERS 🔷🖊✔✔b. the
Fair Credit Reporting Act of 1972
That's correct! The USA PATRIOT Act expands the AML directives of the Bank
Secrecy Act, and FinCEN's final rules amended the USA PATRIOT Act to address the
insurance company needs. The FCRA does not directly relate to money laundering.
Under FinCEN's final rules as they apply to insurance companies, agents and brokers
are required to establish and maintain their own AML programs and procedures.
a. True
b. False - .......ANSWERS 🔷🖊✔✔b. False
That's correct! Agents and brokers are not required to establish separate AML
programs; however, as integral as they are to the insurance business and the
insurance sales process, they have an important role to play in assisting their
companies with AML efforts.
As part of the life insurance application process in compliance with AML
requirements, producers are required to obtain all of the following information
EXCEPT:
WebCE – questions and answers
During which stage of the money laundering process are laundered or cleansed
funds circulated back into the hands of the criminal and ultimately into the financial
system?
a. closet
b. placement
c. layering
d. integration - .......ANSWERS 🔷🖊✔✔d. integration
That's correct! The final stage in the money laundering process is called integration.
Here, the cleansed money is circulated back into the hands of the criminal and
ultimately into the financial system.
Insurance companies are not required to establish anti-money laundering programs,
though they are encouraged to do so.
a. True
b. False - .......ANSWERS 🔷🖊✔✔b. False
That's correct! Title III of the PATRIOT Act specifically addresses money laundering
and expands the Bank Secrecy Act to encompass all financial institutions, including
life insurance companies. The Act's inclusion of insurance companies recognized the
simple fact that some insurance products were being used in money laundering
schemes.
A customer has purchased over a dozen life insurance and annuity contracts over
the past year, using cashier's checks to pay the premiums. If this action is part of a
money laundering operation, which stage does it represent?
a. acquisition
b. placement
c. layering
, d. integration - .......ANSWERS 🔷🖊✔✔c. layering
That's correct! Money laundering is a process that moves illegal money through
three stages on its way to apparent legitimacy: placement, layering, and
integration. The second stage, layering, is achieved by using cash or cash
equivalents to purchase multiple financial instruments that can subsequently be
converted into clean money.
All of the following are federal laws or related rulings that have a direct impact on
anti-money laundering requirements EXCEPT:
a. the Bank Secrecy Act of 1970
b. the Fair Credit Reporting Act of 1972
c. the USA PATRIOT Act of 2001
d. the FinCEN final rules published November 2005 - .......ANSWERS 🔷🖊✔✔b. the
Fair Credit Reporting Act of 1972
That's correct! The USA PATRIOT Act expands the AML directives of the Bank
Secrecy Act, and FinCEN's final rules amended the USA PATRIOT Act to address the
insurance company needs. The FCRA does not directly relate to money laundering.
Under FinCEN's final rules as they apply to insurance companies, agents and brokers
are required to establish and maintain their own AML programs and procedures.
a. True
b. False - .......ANSWERS 🔷🖊✔✔b. False
That's correct! Agents and brokers are not required to establish separate AML
programs; however, as integral as they are to the insurance business and the
insurance sales process, they have an important role to play in assisting their
companies with AML efforts.
As part of the life insurance application process in compliance with AML
requirements, producers are required to obtain all of the following information
EXCEPT:
