Because of their nature, it is unlikely that non-profit organisations (NPO) take out life insurance policies for investment purposes. They would rather be expected to take out life insurance contracts in the form of occupational pension plans as a benefit for their employees or as a salary component. In such cases, the customers would be the NPOs and the amounts invested would be used for the retirement provision of the employees (the insured persons in the insurance contract). Due diligence measures as described in the annex would therefore not be proportionate.
In general, life insurance agreements are long-term contracts and early withdrawals, or early surrenders are not attractive. Therefore, it is questionable whether NPOs would invest the donations received in long-term life insurance policies for investment purposes at all.
In addition, point 2.7 of Section 4 in relation to NPOs deals with the increased risk of TF, which is not relevant for long-term life insurance products.
In Insurance Europe’s opinion, these guidelines are primarily relevant for credit institutions, therefore it maintains that such regulations/guidelines for life insurance products are not necessary.
In general, the ML and TF risks of life insurance products is very low due to the characteristics of the products and the general business model of life insurance. As stated above, life insurance products are very long-term products, early withdrawals are not recommended and during the contract period there are no transactions. In addition, if there are annuities as a pay-out option, the money invested in an annuity can only be accessed in small amounts and over a long period of time, which means that these products are very unattractive for money launderers and the risk is therefore so low as to be negligible.
Insurance Europe supports the inclusive approach to groups such as homeless persons, refugees and persons who may not be deported that is adopted in EBA’s proposed guidelines. At the same time, these groups do not represent a significant share of all customers of life insurance products.
Therefore, Insurance Europe believes that EBA’s guidelines should differentiate between the categories of financial institutions adopting a risk-based approach. In principle, life insurers should not fall within the scope of these guidelines because life insurance products are not suited for such activities and because undertakings already carry out comprehensive requirements, such as customer due diligence. Furthermore, if life insurers remain included in the scope of EBA’s guidelines, the measures envisaged for these companies should be adapted from the general EBA guidelines to be proportional to the low risks of ML and TF for life insurers.
Some paragraphs under the section “general requirements” imply that a number of guidelines are primarily relevant for credit institutions. In principle, life insurers should be excluded from all the guidelines for the reasons explained in the answer to question 2. Above all, life insurers should be excluded from those guidelines that refer mainly to credit institutions.
Since the focus of the guidelines is to give access to bank accounts, insurance products should be out of scope.
The content of this section implies that the guidelines are not applicable to insurance companies.