New anti-money laundering (AML) legislation comes into effect June 1, 2021. The new legislation impacts both the insurer and advisor practices. As such, the advisor anti-money laundering and anti-terrorism financing (AML/ATF) compliance program must be updated.

Areas impacted include:

  • AML requirements extend to beneficiaries when they receive $10,000 or more from a non-exempt policy or annuity.  Advisors may be asked to collect additional requirements for processing death claims and annuity payments, such as:
    • Information records, ID verification, politically exposed person (PEP) determination when receiving $100,000 or more
  • For corporate policyholders:  advisors are required to keep a copy of the official records that contain provisions related to the power to bind a corporation in respect of the policy
  • PEP/HIO:  ex-spouses are now considered to be a relative under the act.  Source of a person’s wealth is required when the person is determined to be a PEP/HIO
  • Identity verification updated
    • Dual process method:  includes additional acceptable sources of information
    • Entities:  includes the addition of widely-held trusts
  • Third party determination:  includes addition of telephone number as well as registration/incorporation number and jurisdiction for entities

Other changes that may affect your business include:

  • Ongoing monitoring:
    • Frequency of ongoing monitoring has been adjusted to ensure monitoring occurs for all clients (including low risk) on a frequency appropriate to the level of risk
    • Ongoing monitoring for entity clients includes confirming beneficial ownership
  • Reasonable measures:  Removal of the obligation to record unsuccessful reasonable measures taken
  • Risk assessment:  includes addition of ‘New developments and technologies’ section outlining the requirement to assess potential ML/TF risks to the business before it is implemented.

The new compliance program template reflects these changes and other revisions that provide additional detail or clarification.

Action required:

When you adopt the updated program, this will help you to ensure your compliance programs are up-to-date and will also allow you to meet your 2-year review obligation. Be sure to keep a copy of your existing programs for your records to demonstrate the on-going self-assessment of your program.

Updating the new program is easy when you follow the steps outlined below and complete the following sections:

  • Title page
  • Part B – Appointment of a compliance officer
  • Part D – Training program – training required with adoption of new program
  • Part E – Approval and adoption of policies, procedures and training program
  • Part F – Program review – be sure to select appropriate sample response and complete this self review which is required at least every two years
  • Part G – Revision history – Insert:
    • Current date
    • Compliance program replaced
    • Reason - Legislation changes effective June 1, 2021

The program is designed to suit the majority of advisor business practices with customization tips in the margin for consideration. You must review and make changes where necessary. Once reviewed, delete the comments in the right-hand margin.

For those who require additional assistance or details, Canada Life has a “how to complete” training video available on RepNet for contracted advisors.

Remember, 
Good Business is Compliant and Compliance Matters!