product, distribution channel risk is mitigated using distributors who are also subject to AML/CTF legislation, which requires a compliance programme to be in place. The following table describes attributes used to assess the vulnerability of a distribution channel and provides lower and higher risk examples. Lower risk Higher risk example example Distributor Distributor Distributors has is overseen not subject to by a AML/CTF AML/CTF regulatory requirements obligations authority and subject to AML/CTF laws equivalent to life insurer or stronger Payment to Customer Customer life insurer pays Life pays a Insurer distributor, directly who then from their pays the Life account at Insurer. a bank or Risk: The securities intermediary dealer obscures the source of payment. Direct Contracted No agents and of banking relationship customer to with Life Life Insurer Insurer employee or
product, distribution channel risk is mitigated using distributors who are also subject to AML/CTF legislation, which requires a compliance programme to be in place. The following table describes attributes used to assess the vulnerability of a distribution channel and provides lower and higher risk examples. Lower risk example Higher risk example Distributor has AML/CTF obligations Distributor is overseen by a regulatory authority and subject to AML/CTF laws equivalent to life insurer or stronger Distributors not subject to AML/CTF requirements Payment to life insurer Customer pays Life Insurer directly from their account at a bank or securities dealer Customer pays a distributor, who then pays the Life Insurer. Risk: The intermediary obscures the source of payment. Direct of customer to Life Insurer Contracted agents and banking No relationship with Life Insurer employee or
Draft%20RBA%20Guidance%20Life%20Insurance%20for%20private%20sector%20consultation.docx