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📋 '''Financial Action Task Force (FATF)''' is the intergovernmental body that sets global standards for combating [[Definition:Money laundering | money laundering]], terrorist financing, and the proliferation of weapons of mass destruction — standards that have direct, binding implications for the insurance industry. Insurers, particularly those offering [[Definition:Life insurance | life insurance]], [[Definition:Annuity | annuity]], and [[Definition:Investment-linked insurance | investment-linked products]], are classified as financial institutions under FATF's framework and must implement robust [[Definition:Anti-money laundering (AML) | anti-money laundering (AML)]] and [[Definition:Know your customer (KYC) | know your customer (KYC)]] controls. FATF's 40 Recommendations form the baseline that national regulators translate into local law, making the task force the de facto architect of the compliance architecture that insurers worldwide must follow.

⚙️ FATF operates through a mutual evaluation process in which member countries undergo peer reviews of their AML and counter-terrorist financing regimes. When a country receives a poor assessment, its insurers and other financial institutions can face heightened [[Definition:Due diligence | due diligence]] requirements from counterparts abroad, and [[Definition:Reinsurance | reinsurers]] may grow cautious about doing business in that jurisdiction. Within insurance companies, FATF's guidance translates into day-to-day obligations: verifying the identity of [[Definition:Policyholder | policyholders]] and [[Definition:Beneficiary | beneficiaries]], screening against [[Definition:Sanctions list | sanctions lists]], filing [[Definition:Suspicious activity report (SAR) | suspicious activity reports]], and conducting [[Definition:Risk assessment | risk assessments]] on products that could be exploited for illicit fund movement — such as single-premium life policies or products with high [[Definition:Cash surrender value | cash surrender values]].

💡 While [[Definition:Property and casualty insurance | property and casualty]] lines face lower inherent money-laundering risk than life and investment products, FATF's expanding focus on beneficial ownership and transparency has started to touch [[Definition:Commercial lines | commercial lines]] operations as well, particularly for large or opaque corporate structures. Jurisdictions that land on FATF's "grey list" of countries under increased monitoring can see insurance market access contract rapidly, as global [[Definition:Insurance carrier | carriers]] and [[Definition:Reinsurance | reinsurers]] pull back to avoid compliance exposure. For [[Definition:Insurtech | insurtech]] firms building digital distribution platforms, embedding FATF-aligned [[Definition:Customer due diligence (CDD) | customer due diligence]] into onboarding workflows is no longer optional — it is a prerequisite for securing [[Definition:Binding authority agreement | binding authority]] from capacity providers and maintaining [[Definition:Regulatory license | licenses]] in regulated markets.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Anti-money laundering (AML)]]
* [[Definition:Know your customer (KYC)]]
* [[Definition:Suspicious activity report (SAR)]]
* [[Definition:Customer due diligence (CDD)]]
* [[Definition:Sanctions compliance]]
* [[Definition:Regulatory compliance]]
{{Div col end}}

Definition:Financial Action Task Force (FATF) - Revision history

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