One of the most common methods of money laundering in the insurance industry is to purchase a policy with illicit funds and then request a refund of the premiums, either partially or fully, before the policy matures.
This way, the money launderer can receive a legitimate payment from the insurance company, effectively washing the dirty money. This technique is also known as premium fraud or early surrender12 According to the Financial Crimes Enforcement Network (FinCEN), the most significant money laundering and terrorist financing risks in the insurance industry are found in life insurance and annuity products, because such products allow a customer to place largeamounts of funds into the financial system and seamlessly transfer such funds to disguise their true origin34 Some indicators of potential money laundering through insurance products are: 12 The customer pays the premiums with cash, cashier's checks, money orders, or other anonymous or unusual payment methods.
The customer overpays the premiums or makes multiple payments in excess of the required amount.
The customer cancels the policy during the free-look or grace period and requests a refund to a different account or a third party.
The customer purchases a policy that is inconsistent with their income, age, or risk profile.
The customer shows little interest in the benefits or terms of the policy, but is more concerned about the cancellation or surrender options.
1: AML in Insurance: How to Detect & Combat Money Laundering, ComplyAdvantage, 2022
2: Anti Money Laundering (AML) In Insurance Industry In 2021, Financial Crime Academy, 2023
3: Money laundering in the insurance industry, Insurance Commission, 2022
4: Money laundering in the insurance industry, Atty. Dennis B. Funa, Business Mirror, 2016
[5]: Anti-Money Laundering Requirements: FAQs for Insurance Companies, FinCEN, 2005

According to the Anti-Money Laundering Specialist (the 6th edition) resources, the Egmont Group is an international network of FIUs that facilitates and prompts the exchange of information, knowledge, and cooperation among its members to combat money laundering, terrorist financing, and associated predicate offences1. The Egmont Group suggests that one of the core objectives that would lead to an effective national FIU is to have absolute trust amongst national and international stakeholders before sensitive information will be exchanged with confidence2. This means that the FIU should establish and maintain a high level of credibility, professionalism, and integrity in its operations, and ensure that the information it receives and disseminates is protected and used appropriately. The FIU should also comply with the Egmont Group's principlesand standards for information exchange, and foster a culture of mutual trust and cooperation with other FIUs and relevant authorities3.
The other three options are incorrect because:
The FIU must operate from physically separated premises from other law enforcement agencies and government offices is not a core objective that the Egmont Group suggests for an effective national FIU.
While the FIU should have operational independence and autonomy, and be free from undue influence or interference, it does not necessarily have to be physically separated from other agencies or offices. The FIU may be located within the judicial, law enforcement, administrative, or hybrid model, depending on the country's legal and institutional framework4.
The FIU meets the Egmont Group assessment criteria is not a core objective that the Egmont Group suggests for an effective national FIU. While meeting the Egmont Group assessment criteria is a requirement for becoming and remaining a member of the Egmont Group, it is not an objective in itself. The assessment criteria are based on the FATF recommendations and the Egmont Group's own documents, and they serve as a benchmark for evaluating the FIU's compliance and effectiveness5.
The FIU must be able to promote the value of the government's commitment to embed a corruption free society within the country is not a core objective that the Egmont Group suggests for an effective national FIU. While the FIU may contribute to the prevention and detection of corruption, as well as the recovery of illicit assets, by analyzing and sharing financial intelligence, it is not the sole or primary responsibility of the FIU to promote the value of the government's commitment to embed a corruption free society within the country. This is a broader and more complex goal that involves multiple actors and factors, such as political will, legal framework, institutional capacity, civil society, media, and international cooperation.
1: ACAMS, CAMS Study Guide, 6th Edition, Chapter 3, p. 64 2: Egmont Group, Egmont Group of Financial Intelligence Units Principles for Information Exchange Between Financial Intelligence Units, June 2013, 3, p. 2 3: Egmont Group, Egmont Group of Financial Intelligence Units Principles for Information Exchange Between Financial Intelligence Units, June 2013, 3, p. 3-4 4: ACAMS, CAMS Study Guide, 6th Edition, Chapter 3, p. 67 5: Egmont Group, Egmont Group of Financial Intelligence Units Support and Compliance Process, June 2013, [6], p. 3-4 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 4, p. 91-92 Reference: https://www.elibrary.imf.org/view/books/069/02365-9781589063495-en/ap01.xml