AML EXAM ANTI MONEY LAUNDERING WEBCEEXAM 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 - CORRECT ANSWER✅✅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 - CORRECT ANSWER✅✅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 - CORRECT ANSWER✅✅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 - CORRECT ANSWER✅✅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 - CORRECT ANSWER✅✅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:
a. the applicant's Social Security or tax identification number
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 - CORRECT ANSWER✅✅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 - CORRECT ANSWER✅✅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 - CORRECT ANSWER✅✅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 - CORRECT ANSWER✅✅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 - CORRECT ANSWER✅✅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:
a. the applicant's Social Security or tax identification number
