Insurance

13-MAR-2009

Risk life insurance

Are risk life insurance products with a prescribed minimum surrender value captured under the AML/CTF Act?

Life policies (including risk life insurance products) are captured by the AML/CTF Act if they have all the following characteristics:

  • contracts of life insurance of at least one year in duration which:
    • provide for payments on the death of a person or a contingency dependent on the termination (but not death by accident or death for a specified sickness) or continuance of human life; or
    • are subject to payment of premiums for a term dependent on the termination (but not death by accident or death for a specified sickness) or continuance of human life; or
    • provide for payment of an annuity for a term dependent on the continuance of human life; and
  • do not involve:
    • benefits provided from a Workplace Relations Act 'organisation' of employees, to employees or their dependents
    • superannuation benefits, pensions or payments to employees or their dependents provided by an employee and/or employer organisation on retirement, disability or death
    • funeral benefits
    • policies issued by an employer to an employee; and
  • are not any of the following types of policies:
    • those with no prescribed minimum surrender value (other than that which may be provided for in the policy documentation and promotional material); that is, to be caught by the AML/CTF Act there needs to be a prescribed minimum surrender value with respect to the policy
    • regular premium policies where the total annual premium payable is less than $1,500 (or such other greater prescribed amount); that is, to be caught by the AML/CTF Act regular annual premiums need to exceed $1,500
    • single premium policies where the single premium is less than $3,000 (or such other greater prescribed amount)
    • consumer credit insurance contracts.

Are risk life insurance products that do not have a prescribed minimum surrender value captured under the AML/CTF Act?

No, these products are not captured.

Reinsurance

Are reinsurance contracts relating to life policies captured under item 37 of table 1 in subsection 6(2) of the AML/CTF Act?

Yes. Reinsurance contracts fall within item 37 where they relate to life insurance policies that are also captured under the AML/CTF Act.

In the reinsurance context in these circumstances, who is the customer of the provider (reinsurer) for the purpose of the applicable customer identification procedure?

The provider (reinsurer) is required to carry out the applicable customer identification procedure in respect of the insurance company (customer).

08-MAR-2013

Related information

05-MAR-2013

AML/CTF Act

AML/CTF Rules

Policies

Self Assessment Questionnaire

31-MAR-2014

Last modified: ...

 

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