What is the primary objective of AML programs in the insurance industry?

• A. Maximize underwriting profits
• B. Detect and deter money laundering and terrorist financing
• C. Expand cross-border sales
• D. Reduce customer due diligence requirements

Answer: (B)

Detecting and deterring money laundering and terrorist financing is the aim of AML programs in the insurance industry. These programs use customer due diligence, ongoing monitoring, and suspicious activity reporting to spot unusual patterns that could indicate illicit funds and to intervene appropriately. In insurance, where large premiums, policy loans, and complex ownership can hide fund flows, strong AML controls help ensure compliance with laws and prevent a insurer from being used to launder money or finance terrorism. The other options don’t fit because maximizing profits, expanding cross-border sales, or reducing due diligence would undermine risk management and regulatory requirements; AML is about reducing risk and maintaining lawful, transparent operations.