17 Jun Overview
The insurance industry, as is true of the financial services industry as a whole, is vulnerable to money laundering and terrorist financing. In addition, there are unique risks associated with the insurance industry and insurance products and transactions. For example, long-term insurance contracts can potentially be used to facilitate money-laundering vehicles, such as:
- Unit-linked or with profit single premium contracts,
- Single premium life insurance contracts storing cash value,
- Fixed and variable annuities, and
- (Second hand) endowment policies.
Insurance professionals—agents, authorized brokers, or others—conducting business in Hong Kong are involved in distribution, underwriting, and claims settlement, and are direct links to the policyholder. For this reason, they are vulnerable to exploitation by money launderers or other criminals seeking to use insurance products for illegal purposes.