Red flags for securities firms and insurers

What supervisors and standard-setters expect

The FATF's 2018 life insurance guidance is candid that many life products are not flexible enough to be a launderer's first choice and that the sector's risk is generally lower than for other financial products. It still says premiums may be paid with criminal proceeds, and that each insurer's assessment should reflect its size, complexity and products, with senior management involved.

In the US, 31 CFR 1023.210 requires a broker-dealer to keep a written anti-money laundering program approved by senior management, with internal controls, a compliance officer, ongoing training and independent testing. It also requires risk-based customer due diligence: understanding the nature and purpose of each relationship to build a risk profile, ongoing monitoring, and identifying the beneficial owners of legal entity customers. A suspicious activity report is due for transactions of at least $5,000, within 30 calendar days of initial detection. In the EU, Regulation 2024/1624 treats investment firms, life and investment-related insurers and the intermediaries that sell life policies as financial institutions, applies from 10 July 2027, and requires due diligence at account opening, for occasional transactions of at least €10,000, and always on suspicion. Its recitals say that where due diligence cannot be completed on a life policy, an insurer may freeze the relationship and withhold the payout instead of terminating.

Recent US cases involve monitoring that did not cover the business. On March 6, 2026, FinCEN assessed $80 million against Canaccord Genuity, the largest Bank Secrecy Act penalty on a broker-dealer. It found an under-resourced program, poorly designed surveillance reports, at least 160 unfiled suspicious activity reports across dozens of over-the-counter securities, and weaknesses its regulator had flagged for years. On August 3, 2026, FINRA fined UBS Financial Services $20 million: from January 2019 to June 2023 more than 60,000 foreign currency wires worth over $10 billion were not adequately monitored, an automated tool omitted about 33% of wires in certain retail accounts, and the failing repeated a 2018 case.

The page's red flags line up with these duties. Offshore or nominee accounts test beneficial ownership checks on entity customers. Quick deposit and sale of thinly traded shares, or proceeds sent to third parties, are what surveillance must flag, and the reporting clock runs from detection. Oversized single premiums, early cancellations and payouts to unrelated parties for insurers test source-of-funds understanding and the beneficiary checks. The enforcement lesson is coverage: a flag only counts if the data feeds the monitoring that raises it.

As of October 2026: Checked October 21, 2026. Both enforcement actions are settlements; FINRA's UBS finding was accepted without admitting or denying, while Canaccord admitted its facts. A separate FinCEN penalty on UBS was mentioned in secondary coverage but not verified, so it is not stated here. The US insurance company program rule (31 CFR 1025.210) and the FATF securities guidance of October 26, 2018 were read but are not described in detail. UK and Canadian securities rules are not covered. EU Regulation 2024/1624 is not yet in application. Rule 3310 itself was not opened; the FINRA release names it.