MONEY LAUNDERING IN INSURANCE BUSINESS: PREVENTIVE AND SUPPRESSIVE MEASURES

Abstract

Insurance business is a target of money laundering like another financial intuition such as bank and security firm in reality. A money launderer pays the insurance company premium which derived from crime, while the insurance company has duty to perform customer due diligence and should know that customer might be a money launderer or money derived from predicated crime.

                   There is a situation so called “dual purpose transaction”, a situation that the criminal enters to a transaction aiming either for personal use or laundering money that is quite hard to proof because a money launderer generally uses financial institutions to launder proceeds of crime like another bona fide customer. Since money laundering is a process to “conceal and disguise” and intention to launder money and simply spend money is relatively different, the persecutor needs to prove beyond reasonable doubt about specific intention to “conceal or disguise” of the customers. However, “acquiring possession and use proceeds of crime” of both criminal (customer as a spender) and insurer (financial institution as a transferee)has knowledge that premium has been derived from predicate offense is a criminal offense in many jurisdiction such as the U.S, the U.K and the United Nations Convention Against Illicit Traffic in Narcotic and Psychotic Substance 1988 which Thailand is a member state criminalizes such offense.

                   The criminalization of “possession, acquiring and use” of proceeds of crime can makes a wide range of application against both criminal and insurer in the
situation of “dual –purpose transaction”. If the prosecutor fails to prove specific
intention “to conceal and disguise”, he can still prove about the possession, acquiring and usage of proceeds of crime in both civil case and criminal case. Moreover, the criminalization of such offense makes Thailand comply with the United Nations Convention against Illicit Traffic in Narcotic and Psychotic Substance 1988 entirely. 

                   Furthermore, the insurance company shall be supervised about anti-money laundering compliance by the Anti-Money Laundering Organization effectively by risk-based approach, the AMLO also can allocate resource more wisely.