Terrorism laws include insurers

Through amendments to Bill C-36, the federal government is proposing to extend the laws around terrorism financing to property and casualty insurers, reports Michael Hafeman, assistant superintendent in the Office of the Superintendent of Financial Institution’s (OSFI) specialist support sector.

In an address to the Canadian Insurance Accountants Association, Hafeman notes that, although p&c insurers are not required to report suspicious financial transactions to FINTRAC as part of the Proceeds of Crime (Money Laundering) Act, they will be required to report to the RCMP and CSIS. “By their nature, p&c companies may be subject to somewhat less risk of involvement in money laundering and terrorism financing than other financial institutions,” Hafeman admits. However, the International Association of Insurance Supervisors (IAIS) has just released guidelines for insurers, including examples of how money laundering can be carried out through p&c companies, such as insurance taken out on “phantom” ships, with regular claims filed. A “clean” claims cheque is “a prized possession” for a money launderer, Hafeman says.

He adds that the current OSFI guidelines on non-compliance with the Proceeds of Crime Act that are currently aimed at banks will be extended to life insurers. P&c insurers could well be next on the agenda, he warns.