Anti-Money Laundering Programs for Insurance Companies

1Language expanding the scope of the Bank Secrecy Act to intelligence or counter-intelligence activities, including analysis, to protect against international terrorism was added by section 358 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the USA PATRIOT Act), Public Law 107–56. 2See 67 FR 60625 (Sept. 26, 2002). 3See 31 CFR 103.170, as codified by interim final rule published at 67 FR 21110 (Apr. 29, 2002), as U.S.C. 552(a) and delegated to the Director, Bureau of Prisons, we amend 28 CFR part 523 as follows. Subchapter B—Inmate Admission, Classification, and Transfer
PART 523—COMPUTATION OF
SENTENCE

• 1. The authority citation for 28 CFR
     part 523 is revised to read as follows:
     Authority: 5 U.S.C. 301; 18 U.S.C. 3568 (repealed November 1, 1987 as to offenses committed on or after that date), 3621, 3622, 3624, 4001, 4042, 4081, 4082 (Repealed in
     part as to conduct occurring on or after
     November 1, 1987), 4161–4166 (repealed October 12, 1984 as to offenses committed on or after November 1, 1987), 5006–5024 (Repealed October 12, 1984 as to conduct occurring after that date), 5039; 28 U.S.C. 509, 510.
• 2. Revise § 523.20 to read as follows:
     § 523.20 Good conduct time.
     (a) For inmates serving a sentence for offenses committed on or after November 1, 1987, but before September 13, 1994, the Bureau will award 54 days credit toward service of sentence (good conduct time credit) for each year served. This amount is prorated when the time served by the inmate for the sentence during the year is less than a full year. (b) For inmates serving a sentence for offenses committed on or after September 13, 1994, but before April 26, 1996, all yearly awards of good conduct time will vest for inmates who have earned, or are making satisfactory progress (see § 544.73(b) of this chapter) toward earning a General Educational Development (GED) credential. (c) For inmates serving a sentence for an offense committed on or after April 26, 1996, the Bureau will award (1) 54 days credit for each year served (prorated when the time served by the inmate for the sentence during the year is less than a full year) if the inmate has earned or is making satisfactory progress toward earning a GED credential or high school diploma; or (2) 42 days credit for each year served (prorated when the time served by the inmate for the sentence during the year is less than a full year) if the inmate has not earned or is not making satisfactory progress toward earning a GED credential or high school diploma. (d) Notwithstanding the requirements of paragraphs (b) and (c) of this section, an alien who is subject to a final order of removal, deportation, or exclusion is eligible for, but is not required to, participate in a literacy program, or to be making satisfactory progress toward earning a General Educational Development (GED) credential, to be eligible for a yearly award of good conduct time. (e) The amount of good conduct time awarded for the year is also subject to disciplinary disallowance (see tables 3 through 6 in § 541.13 of this chapter). [FR Doc. 05–21969 Filed 11–2–05; 8:45 am] BILLING CODE 4410–05–P DEPARTMENT OF THE TREASURY 31 CFR Part 103 RIN 1506–AA70 Financial Crimes Enforcement Network; Amendment to the Bank Secrecy Act Regulations—Anti-Money Laundering Programs for Insurance Companies AGENCY: Financial Crimes Enforcement Network, Treasury. ACTION: Final rule. SUMMARY: The Financial Crimes Enforcement Network is issuing this final rule to prescribe minimum standards applicable to insurance companies pursuant to the provision in the Bank Secrecy Act that requires financial institutions to establish anti￾money laundering programs and to define the companies and insurance products that are subject to that requirement. DATES: Effective Date: December 5, 2005. Applicability Date: May 2, 2006. See 31 CFR 103.137(b) of the final rule contained in this document. FOR FURTHER INFORMATION CONTACT:
     Financial Crimes Enforcement Network, Regulatory Policy and Programs Division on (202) 354–6400 (not a toll￾free number). SUPPLEMENTARY INFORMATION:
     I. Background
     A. Statutory Provisions The Bank Secrecy Act, Public Law 91–508, as amended, codified at 12 U.S.C. 1829b, 12 U.S.C. 1951–1959, and 31 U.S.C. 5311–14, 5316–5332, authorizes the Secretary of the Treasury to issue regulations requiring financial institutions to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters, or in the conduct of intelligence or counter￾intelligence activities, including analysis, to protect against international terrorism, and to implement anti-money laundering programs and compliance procedures.1 Regulations implementing Title II of the Bank Secrecy Act appear at 31 CFR Part 103. The authority of the Secretary to administer the Bank Secrecy Act has been delegated to the Director of the Financial Crimes Enforcement Network. On October 26, 2001, the President signed into law the USA PATRIOT Act.
     Section 352 of the USA PATRIOT Act,
     which became effective on April 24, 2002, amended 31 U.S.C. 5318(h) to require anti-money laundering programs for all financial institutions defined in 31 U.S.C. 5312(a)(2). At a minimum, the anti-money laundering programs are required to include:
     (A) The development of internal policies, procedures, and controls; (B) the designation of a compliance officer; (C) an ongoing employee training program; and (D) an independent audit function to test programs. 31 U.S.C. 5318(h)(1).
     Section 352(c) of the USA PATRIOT Act
     directs the Secretary to prescribe regulations for anti-money laundering programs that are ‘‘commensurate with the size, location, and activities’’ of the financial institutions to which such regulations apply. Section 5318(h)(2) permits the Secretary to exempt from this anti-money laundering program requirement those financial institutions not currently subject to the Financial Crimes Enforcement Network’s regulations implementing the Bank Secrecy Act. Section 5318(a)(6) further provides that the Secretary may exempt any financial institution from any Bank Secrecy Act requirement. Taken together, these provisions authorize the issuance of anti-money laundering program regulations that may differ with respect to certain kinds of financial institutions, and that may exempt certain financial institutions from the requirements of section 5318(h)(1). Although insurance companies have long been defined as financial institutions under the Bank Secrecy Act (see 31 U.S.C. 5312(a)(2)(M)), we, prior to the notice of proposed rulemaking preceding this final rule,2 had neither defined ‘‘insurance companies’’ for purposes of the Bank Secrecy Act nor issued regulations regarding insurance companies. In April 2002, we deferred the anti-money laundering program requirement contained in 31 U.S.C. 5318(h) that would have applied to the insurance industry.3 The deferral