Regulatory Alerts2018-01-18
Life Insurance Due Diligence Regulation (LV-SoV)
The Financial Market Authority (FMA) issued this regulation to define low-risk life insurance policies eligible for simplified due diligence under the Financial Markets Anti-Money Laundering Act. The rule permits insurers to apply reduced scrutiny to specific policies, such as those with annual premiums under EUR 1,200 or one-off payments under EUR 2,500, as well as certain pension and state-sponsored retirement schemes. Insurers must still monitor transactions for unusual activity and must abandon simplified measures if evidence suggests a higher risk of money laundering or terrorist financing.
All English translation of the authentic German text is unofficial and serves merely information purposes. The official wording in German can be found in the Austrian Federal Law Gazette (Bundesgesetzblatt; BGBl.). All translations have been prepared with great care, but linguistic compromises had to be made. The reader should also bear in mind that some provisions of these laws will remain unclear without certain background knowledge of the Austrian legal and political system. Please note that these laws may be amended in the future and check occasionally for updates. Life Insurance Due Diligence Regulation (Lebensversicherung-Sorgfaltspflichtenverordnung – LV-SoV) Full title Regulation of the Financial Market Authority (FMA) on the applicability of simplified due diligence in relation to life insurance (Life Insurance Due Diligence Regulation (LebensversicherungSorgfaltspflichtenverordnung – LV-SoV)) Original Version: Federal Law Gazette II No. 1/2017 Preamble/Promulgation clause On the basis of Article 8 para. 5 of the Financial Markets Anti-Money Laundering Act (FM-GwG – Finanzmarkt-Geldwäschegesetz), published in Federal Law Gazette I no. 118/2016, the following shall be determined by regulation with the consent of the Federal Minister of Finance: Text Determination of a low risk of money laundering and terrorist financing in relation to life insurance operations Article 1. In the field of operations of life insurance pursuant to nos. 19 to 22 of Annex A to Article 7 para. 4 of the Insurance Supervision Act 2016 (VAG 2016 – Versicherungsaufsichtsgesetz 2016), published in Federal Law Gazette I no. 34/2015, in the version of the federal act published in Federal Law Gazette I no. 118/2016, a low risk of money laundering or terrorist financing exists in relation to the insurance policies listed in Article 2. Article 2. (1) Insurance undertakings may apply simplified due diligence towards customers or beneficiaries in relation to
- Life insurance policies for which the total premiums to be paid in the course of a year do not exceed EUR 1 200,
- Life insurance policies where there is a payment of a one-off premium that does not exceed EUR 2 500,
- Pension scheme policies, provided that the policies neither contain an early surrender option, nor may they be used as collateral for loans,
- Insurance policies in relation to company old-age provision,
- State-sponsored retirement provision policies pursuant to Article 108g of the Income Tax Act 1988 (EStG 1988 – Einkommensteuergesetz 1988), published in Federal Law Gazette I no. 400/1988, in the version of the federal act published in Federal Law Gazette I no. 77/2016,
- Supplementary pension insurance policies pursuant to Article 108b EStG 1988. and the transactions related to them. (2) Insurance undertakings shall also, in applying simplified due diligence, carry out sufficient monitoring of the transactions and business relationships to enable the detection of unusual or suspicious transactions. In the case of the life insurance policies listed in para. 1, they shall not assume a low risk of money laundering or terrorist financing if there is information available to suggest that the risk of money laundering or terrorist financing is not in fact low. In this case, simplified due diligence shall not be applied.