December 16, 2002 Page 3 of 4
activity to the insurance company for which an application was completed, and the insurance company becomes obligated to undertake any investigation and reporting necessary to comply with the SAR requirement; and (4) if the distributors report directly to FinCEN, obligate the distributors to also inform the insurance company for whose policy an application was completed that the distributor has reported the suspicious activity and provide that the insurance company would not need to make an additional SAR. This solution provides a much more efficient resolution to the distributor issue, addresses the situation when an application is not completed, and achieves the reporting goals of the USA PATRIOT Act.
Proposed Rule – section 103.16 (b)(2) Transactions Requiring Reporting
As currently drafted, the Proposed Rule provides a $5,000.00 threshold amount triggering a report of suspicious activity. However, the Proposed Rule does not provide any direction concerning the time frame for aggregation. We respectfully request a time frame not to exceed one year for any aggregating requiring suspicious activity reporting. Such aggregation guidance will greatly assist with compliance and will ease any burden on the obligation to track insurance policy activity.
Proposed Rule – section 103.16 (c) Filing Procedures/What to File
The ACLI is pleased to see the Proposed Rule mention a specific SAR for insurance companies. We heartily endorse the creation of a form specifically designed for the insurance industry. We would very much like to work with Treasury to provide assistance needed to create the form so it is in a workable format and easily understood by life insurance companies.
Proposed Rule – section 103.16 (c)(i) Filing Procedures
As with this same language in the proposed rule to section 352, the Proposed Rule intent appears to avoid compliance redundancy. That is, it is our understanding that the intent of this section is to avoid placing a burden on the life insurer by requiring duplicative suspicious activity reporting if the life insurer is selling through a registered representative who is already subject to a suspicious activity reporting program implemented by his or her Broker-Dealer. Therefore, we respectfully request adding clarifying language to this section to state: “An insurance company or a Broker-Dealer with a suspicious activity reporting program distributing the insurance company’s products that is registered or required to register . . . to the extent that the company or a Broker-Dealer distributing the company’s products complies with the suspicious activity reporting requirements applicable to such activities that are imposed under §103.19”.
Supplementary Information – Sec. II, 67 Fed. Reg. 64,072
It is very helpful for the Proposed Rule to list examples of “red flags” concerning the types of events generating suspicious activity reporting. We appreciate Treasury’s recognition that whether activity is reported is based upon “all the facts and circumstances relating to the