The hidden AML risks in unregulated insurance products

Assessing AML Risks in Unregulated Insurance Products

A recent discussion highlights a common assumption in the insurance industry regarding Anti-Money Laundering (AML) compliance: “This product isn’t regulated for AML, so we don’t need to monitor it.” Often, this claim is backed by existing regulations that mainly focus on life insurance policies, leaving non-life products like motor, property, travel, and liability insurance in a grey area.

Who’s Affected?

This trend could impact a range of industry players including insurers, brokers, and customers. While many companies feel secure in their operations, there is a hidden risk that could arise from overlooking AML considerations in unregulated products. The failure to monitor these offerings might expose businesses to regulatory scrutiny or inadvertently facilitate illicit financial activities.

Regulatory Oversight Gaps

Current regulatory frameworks tend to lean heavily towards life insurance and often neglect non-life products. This poses a significant challenge for insurers operating in markets where such products are prevalent yet less scrutinized. Consequently, insurers could be inadvertently opening themselves up to compliance risks.

What’s the Way Forward?

Insurers are encouraged to reassess their compliance structures and consider incorporating AML monitoring across all product lines, regardless of their regulatory status. By recognizing the risks associated with unregulated products, companies can bolster their defenses against potential legal and reputational harm.

Staying informed and adapting to regulatory changes is vital for all stakeholders in the insurance space, ensuring they’re not caught off guard as AML oversight evolves.

Original Source: https://fintech.global/2025/11/18/the-hidden-aml-risks-in-unregulated-insurance-products/