If a life insurance company fails to meet BSA record-keeping and reporting requirements, what penalties may be imposed?

• A. A warning with no penalties
• B. Mandatory civil litigation
• C. Fines of up to $500,000 per violation
• D. Imprisonment of executives only

Answer: (C)

When a life insurance company fails to keep required BSA records or file the necessary reports, regulators can impose civil monetary penalties. The amount can be as high as up to $500,000 for each violation, and the total penalties can rise with multiple or more serious, ongoing failures. This reflects the seriousness of having strong AML controls and the deterrent purpose of the fines. While individuals may face criminal penalties for willful wrongdoing, the standard remedy for a company’s noncompliance is civil fines up to the stated cap per violation.