Bankers might argue, but some industry observers believe detecting a money-laundering scheme at a bank is a little less complicated than uncovering similar activities at an insurance company. Its real easy to detect [at a bank], says Rick Delotto, senior research analyst for Gartner. Someone shows up with a suitcase full of money and a slightly confused expression on his face. Bankers have had a 30-year head start over insurers in dealing with money-laundering issues, but carriers are highly experienced in dealing with government regulators. The meat and potatoes compliance issues for insurersform filings, rates, licensing, and proceduresare longstanding concerns on the minds of carriers, while money-laundering issues and growing lists provided by the Office of Foreign Assets Control (OFAC) have grabbed a great deal of attention over the last 18 months. Since 9/11, terrorism issues have taken the forefront, but regulatory issues are still in the background, says Tom Tomlinson, directorrate development and filings, at commercial line carrier Bituminous Insurance. The NAIC has to continue to strive to meet market goals as best it can.

The USA PATRIOT Act (take a deep breath here: Uniting and Strengthening America by Providing Appro-priate Tools Required to Intercept and Obstruct Terrorism) was the federal governments reaction to the 9/11 attacks. One of the chief areas of concern for life insurers is a section dealing with efforts to stop money-laundering scams. While this area hasnt been a major concern for property/casualty in-surers (at least for now), that group has had to deal with the Treasury Departments OFAC list that requires American businesses not to conduct any business with those entities that appear on the list. Lynn Snyder, assistant vice president of compliance for Chubb Group of Insurance Companies, says the OFAC list is difficult for insurers to deal with. There are so many names, she says. You may not even know youre dealing with one of these listed persons or entities until a claim arises and you obtain more specific detail about the claimant.

There are software packages available, Snyder says, that will check on every risk an insurer faces to determine whether the insurer is dealing with some type of prohibited entity or person. Its not foolproof, she says. But its probably the best the vendors have come up with to date.