AML Certification CAMS Release Date

Paying premium several years in advance and terminating early for a refund (A):“A typical red flag is when a policyholder pays large premiums up front and then seeks early termination to receive a refund. This can be used to launder illicit funds by integrating them into the financial system and then retrieving ‘clean’ money.”(CAMS 6th Edition, Life Insurance ML/TF Risks; FATF Guidance for a Risk-Based Approach for the Life Insurance Sector)

Regularly switching policies and accepting penalties (D):“Frequent changes in insurance policies or products, even at a financial loss, are considered suspicious. This may indicate an attempt to obscure the money trail or integrate illicit proceeds.”(CAMS 6th Edition, ML/TF Red Flags in Life Insurance)

Incorrect Options:

B: Having multiple policies is common and not itself a red flag.

C: High premiums/payouts are not inherently suspicious.

E: Beneficiary payouts to elderly people are not ML/TF red flags.

UN sanctions regimes are not punitive but aim to:

B: “Support peaceful resolution of conflicts.”

D: “Deter non-democratic and unconstitutional changes of government.”

E: “Promote respect for human rights and humanitarian law.”(CAMS 6th Edition, United Nations Sanctions; UN Security Council Mandates)

Incorrect:

A: The UN does not impose sanctions to force regime type.

C: Sanctions are not for punishing weak AML controls.

The Basel Committee on Banking Supervision (BCBS) requires that the board of directors establish and oversee the compliance function and approve the bank's AML/CTF compliance policies and procedures, including processes for identifying, assessing, monitoring, and reporting compliance risks.

“The board of directors should establish a compliance function and approve compliance policies and processes for identifying, assessing, monitoring, and reporting compliance risks throughout the organization.”

(CAMS 6th Edition, Corporate Governance and Oversight; BCBS, Corporate Governance Principles for Banks, Principle 6)