Insurance Europe has published its response to a consultation by the European Commission (“the Commission“) on its action plan for a comprehensive EU policy on preventing money laundering (“ML“) and terrorist financing (“TF“).
Insurance Europe warned that the action plan should avoid being bank-centric and must take account of the fact that, while the banking sector is clearly vulnerable to ML/TF, insurers’ business models and products do not lend themselves easily to such operations.
Further, Insurance Europe says, given that the mandate to supervise the whole financial sector – including insurers – has been given to the European Banking Authority (“EBA“), it feels there is a real risk that the EBA will enforce a banking-related supervisory approach across all sectors, ignoring the differences between sectors’ exposure to ML/TF risks. This risk. it says, will remain even if a new, centralised supervisor is set up to take over from the EBA.
Insurance Europe also makes the point that allocating a cross-sector jurisdiction to the EBA (or a new centralised authority) challenges the foundation of the European system of financial supervision – which is based on a clear separation of tasks and competences between the European Supervisory Authorities.