Which statement best distinguishes customer due diligence (CDD) from enhanced due diligence (EDD) in insurance AML?

• A. EDD replaces CDD for all customers.
• B. CDD verifies identity and assesses money laundering risk; EDD applies to higher-risk cases with more rigorous verification and ongoing monitoring.
• C. CDD and EDD are identical processes.
• D. CDD only records customer addresses.

Answer: (B)