Life insurance caught up in anti-money laundering cycle

In a recent submission to the Foreign Affairs, Defence and Trade Select Committee on the Anti-Money Laundering and Countering Financing of Terrorism Bill, the ISI stated it was particularly disappointed that its repeated recommendations to exempt pure risk life insurance from the regime had not been adopted.

It believes pure risk life insurance such as term life; trauma; income protection; accident cover; and permanent disablement cover, should be excluded from the financial activities covered by the bill. The Australian regime offers such an exemption.

"Pure risk life insurance is neither suitable for, nor likely to be used by individuals seeking to launder money or finance terrorism," the ISI submission says.

ISI chief executive Vance Arkinstall believes it got a good hearing from the select committee.