The U.S. Patriot Act requires financial institutions to establish anti-money laundering programs.

Rep. Oxley said there is little evidence of money laundering being conducted through insurance products.

"It would be particularly difficult to launder money through property-casualty products or life products without cash value," he wrote.

"The commensurate requirements placed on underwriters and agents of these products should be correspondingly less," Rep. Oxley said.

Indeed, he said, where an agent, broker or company does not accept cash or cash equivalents in unusually large amounts, imposing the full requirements of the Patriot Act would be an unnecessary burden.

It is important, Rep. Oxley said, that Treasury consult and coordinate with state insurance commissioners and the Kansas City, Mo.-based National Association of Insurance Commissioners.

"A two-way dialogue between the insurance regulators and the Treasury Department would help educate both sides to best determine the appropriate level of required regulation," Rep. Oxley said.

The Treasury Department is currently developing regulations to implement the U.S. Patriot Act, including the nature of requirements that will be imposed on the insurance industry.