The Insurance Business and the Anti-Money Laundering Regulations

Resolution No. 202/2015 ("Resolution 202"), jointly issued by the Ministry of Justice and Human Rights (“Ministerio de Justicia y Derechos Humanos”) and the Financial Information Unit ("FIU" or “Unidad de Información Financiera”), i.e., the agency responsible for preventing money laundering and the financing of terrorism, was published in the Official Gazette on June 24, 2015. Resolution 202 abrogated and substituted Resolution FIU 230/2011 ("Resolution 230").

You may find below a brief overview of the most relevant amendments to the system of prevention of money laundering in the insurance business established by Resolution 202.

Resolution 230 had established that the following were Obliged Subjects: "insurance brokers, agents, brokers, experts and adjusters [...] only with respect to annuity or life insurance”. Resolution 202 has eliminated the limitation to "annuity and life insurance". Resolution 202 has also excluded "agents, experts and adjusters" as Obliged Subjects, although it has clarified that "insurance broking companies and insurance agents” (agentes institorios) are considered Obliged Subjects.

Chapter II of Resolution 202 has added certain regulations concerning the taking out of insurance products through (i) insurance brokers, (ii) insurance broking companies whose net worth does not exceed AR$ 10 million (approximately, USD 1.1 million at the official exchange rate), or (iii) insurance agents. Such individuals or entities shall be responsible for requesting and delivering to the insurance companies the information and documentation concerning the identification of customers. This obligation shall be included in the agency agreements and/or any other instrument governing the contractual relationship. The relevant information and documentation must be delivered to the insurance company within 30 days from the date the policy is issued.

Chapter III establishes the obligation to adopt "policies to prevent and deter money laundering and the financing of terrorism" aimed at insurance companies and insurance broking companies whose net worth exceeds AR$ 10 million.

With respect to “know-your-customer” rules, Obliged Subjects must request the information set out in Chapter IV of Resolution 202 regardless of the value of the policy. Additional documentation may be required when a policy is taken out by a company, where a single premium or total premiums during a 12 month period is equal or higher than AR$ 130,000 (approximately, USD 14,000).

In addition, special procedures are established for policies or premiums in excess of AR$ 140,000 (approximately, USD 15,000) in the case of individuals or AR$ 260,000 (USD 29,000) in the case of companies. The same procedures must be observed when an insurer must pay a claim out of court, and AR$ 450,000 (approximately, USD 49,000) or more is paid to an individual during a period of 12 months, or AR$ 900,000 (approximately, USD 99,000) to companies.

Obliged Subjects must also report via the FIU’s website customers who have not complied with an information request. These reports shall be made on a monthly basis, starting on September 1, 2015, and will contain information on the transactions of the preceding month.

Resolution 202 also increased the sums concerning policy rescissions that result in payments to the insured of or exceeding AR$ 70,000 (approximately, USD 8,000) or AR$ 130,000 (approximately, USD 14,000) for individuals or companies, respectively, or when partial surrenders or withdrawals exceed AR$ 260,000 (approximately, USD 29,000).

Article 31 established the obligation on Obliged Subjects that outsource all or part of "the care, custody and/or administration" of the information and/or documentation collected, or where such documentation is not available at the address registered with the FIU, to report to the FIU the address where the information is actually located. They must also report to the FIU of any changes within 72 hours.

Resolution 202 has also established that Obliged Subjects must report suspicious transactions to the FIU within 30 days, regardless of the longer period set forth in Article 21 bis of Law No. 25,246.