Which of the following is an essential element of an AML program plan?

• A. A plan to market to new customers.
• B. A strategy to maximize profits.
• C. A system for transaction speed optimization.
• D. A framework to verify customer identity and prevent money laundering.

Answer: (D)

Verifying customer identity and preventing money laundering is at the heart of an AML program. Establishing a robust framework for know-your-customer controls and ongoing due diligence lets an insurer know who its customers are, assess their risk, and continually monitor transactions for unusual or suspicious activity. This identity verification and continuous monitoring enable timely detection of potential laundering schemes, proper escalation, and required reporting to regulators. Without this foundation, illicit funds can move through policies or accounts with fewer checks, increasing regulatory and compliance risk.

The other options describe business aims (marketing to new customers, maximizing profits) or operational goals (speeding up transactions) that don’t establish the preventive controls necessary to identify, assess, and mitigate AML risk.